Mumbai, June 23: R. Mukundan, the President of the Confederation of Indian Industry (CII), stated on Tuesday that India needs to become more competitive globally to achieve its goal of becoming a $10 trillion economy. He emphasized the importance of accelerating progress in trade, manufacturing, investment, and innovation amid changing geopolitical and technological landscapes. In an exclusive interview with a news agency, Mukundan shared insights on critical issues such as economic reforms, foreign direct investment (FDI), free trade agreements (FTAs), green development, artificial intelligence (AI), and energy security.
During the conversation, Mukundan highlighted that India has made remarkable progress in several sectors over the past 12 years. Significant reforms have been observed in electricity, logistics, railways, ports, and shipping. However, he noted that India must outperform countries like China and Vietnam to become a global manufacturing hub. He stressed the need to focus not just on the ‘ease of doing business’ but also on the ‘speed of doing business.’
Regarding FDI, Mukundan pointed out that while Indian companies are investing abroad, more reforms are needed to attract foreign investment to India. Simplifying and expediting the investment process could bring more capital into the country.
On the India-U.S. free trade agreement, he mentioned that although India has signed several FTAs, their utilization has not reached expected levels. He emphasized the need to increase ‘free trade utilization’ (FTU). According to him, there are significant opportunities for collaboration between India and the U.S. in sectors like defense, aerospace, and advanced manufacturing.
Discussing the goal of a $10 trillion economy, Mukundan stated that India must significantly enhance its shipping, port, and railway capacities. Additionally, digitizing various government and industrial processes is essential for improving efficiency. He believes that a robust infrastructure will be the foundation for rapid economic growth.
Regarding the Production-Linked Incentive (PLI) scheme, he noted its success in the electronics sector and the positive outcomes it has generated. However, he suggested expanding PLI schemes to labor-intensive sectors such as furniture and toys to further boost domestic manufacturing.
On green policies and energy transition, Mukundan explained that developing electricity transmission networks takes time, so more focus should be placed on strengthening distribution systems. He mentioned that the industry has provided several suggestions to the government, and work is ongoing in this area.
Mukundan further stated that while AI technology is still in its early stages, there is a need for its widespread application. He suggested that effective use of AI in healthcare, education, infrastructure, and administrative tasks could enhance productivity and service quality.
Regarding ethanol blending, he asserted that strengthening energy security should be a national priority. He noted that there is no negative impact from ethanol blending in vehicles manufactured after 2020. He also called for better vehicle scrappage policies and incentive schemes to promote the use of clean fuel.
On the issue of water usage in ethanol production, he advised learning from Israel in water management. He referenced Prime Minister Narendra Modi’s ‘Per Drop More Crop’ initiative, which aims to promote better water conservation and encourage less water-intensive crops for a more sustainable agricultural sector.
Addressing the ongoing geopolitical tensions in West Asia and their impact on inflation, Mukundan mentioned that the government and industry have worked together to prevent rising costs from reaching consumers in most sectors. However, some areas have been affected. He pointed out the significant disparity in electricity costs across various states and emphasized the need to focus on reducing these costs to enhance industrial competitiveness.
Mukundan concluded by stating that India possesses strong demographic advantages, a growing domestic market, and a rapidly evolving technological ecosystem. With continued focus on infrastructure, investment, digitalization, green energy, and innovation, India can secure a stronger position in the global economy in the coming years.
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