As director of JK Organisation – one of India’s most respected corporate groups – and Vice Chairman and Managing Director of one of its most high profile companies, JK Tyre and Industries, Dr Raghupati Singhania is one of India’s foremost industrialists.
Dr Singhania, a member of the well-known Singhania family, one of India’s most prominent and long standing business families was in New Zealand earlier this month.
The group’s business interests are vast and range from cement to rubber and from agriculture to textiles, with several other sectors in between thrown in for good measure.
JK Tyre & Industries are pioneers of radial technology in India and leaders in the Indian tyre Industry. Dr Singhania is also Chairman, Fenner (India); Director, JK Lakshmi Cement Limited and JK Agri-Genetics Limited; President, Hari Shankar Singhania Elastomer & Tyre Research Institute (HASETRI); Member-Managing Committee, Pushpawati Singhania Research Institute (PSRI); and director of various other public limited companies.
Apart from achieving all time high sales earlier this year, JK Tyre recorded excellent profitability and stepped up the dividend to shareholders. The company is in the process of greatly expanding its production capacities by millions of tyres a year to keep pace with India’s booming automotive sector, which is seeing record growth.
While in Auckland, Dr Singhania took time off from his busy schedule to speak exclusively to Indian Weekender on a range of topics – from matters as mundane as business opportunities between India and New Zealand to more complex ideas relating to India’s future as a economic powerhouse.
Dr Singhania is as erudite a thinker and speaker as he is astute as a businessman. He gave his incisive views and perspectives in replies to questions from Indian Weekender editor in chief Dev Nadkarni:
What brings you to New Zealand and what are your impressions of the country?
I was here to attend the annual meeting of the Asia New Zealand Foundation of which I have been an honorary adviser for many years. We meet once a year in a different country and this year it happened to be here. I am back in New Zealand after quite a few years and am impressed by the all round progress it has made. New Zealand has a great reputation and is viewed favourably by Indians. In Wellington, I had the opportunity to meet Prime Minister John Key, Governor General Anand Satyanand and Foreign Affairs Minister Murray McCully.
As you know, New Zealand is actively pursuing a free trade agreement with India, as are many other countries around the world because of the fabulous potential for trade that India’s fast growing economy offers. Does the prospect of an FTA with comparatively tiny New Zealand hold real interest for India?
I think it does. India now realises that every country, no matter what its size, has something unique to offer – and in the case of New Zealand, India knows fairly well on how it could possibly benefit from its innovations not only in the agriculture and dairy sectors but also in light engineering technologies, besides other fields. There is much that India’s technological prowess in the IT and telecommunications sector that New Zealand can look at. I think there is a good chance for both countries to benefit from the future FTA.
Are there any misgivings in India’s farming and dairy sector about teaming up with New Zealand – such as the greater use of technology and automation putting more people out of work and things like that…
India is a vast country and there are bound to be all sorts of opinions. But there is a general realisation in all sectors how much the country’s productivity has lagged by not adopting technology and automation early. So, though you might encounter some fringe elements furthering extreme arguments, by and large, people are willing to take a far more sensible view and approach than ever before. India has come a long way in that sense.
Which are the areas that New Zealand has the best opportunities? One logical area would be post harvest preservation infrastructure and technologies? What do you think?
This is exactly what I was telling people in Wellington. That’s the area to concentrate on. India loses a huge percentage of its agricultural production because of poor storage facilities, handling and transportation. Centralised planning, outdated inventory management systems, bad infrastructure and of course corruption cause unaffordable losses in food production at a time when food security is a huge issue worldwide. I would say this is the right area to begin with. Food production offers the biggest potential because of growing economies but also brings in challenges because of pressure on space, climate change and a host of other problems. Technology, management, efficiency and the evolution of new types of nutritious food – superfood, if you will – will be key to survival. Partnership with New Zealand can help India usher in a new green revolution.
[Editor’s note: After last month’s FTA talks in New Zealand, Indian officials focused on the quality of New Zealand produce and the strength of the New Zealand cool chain, according to a NZ trade ministry media release. See report]
What about creative industries like post production, software and so on?
Why not? India has a huge filmmaking base, which is becoming increasingly international and New Zealand has made a name for itself as a post-production and animation hub. There are tremendous opportunities here and need to be explored. I see great scope for partnership in other technology businesses like software and telecommunication.
As a leading industrialist in an economy growing as fast as it is, what would you say are the three biggest problems working in present day India with all its great potential that is often matched with the enormity of multiple problems?
For one, we now are paying the price for delaying infrastructure development so unconscionably. Our infrastructure growth is simply not able to catch up with the growth rate of the economy. That’s one of the biggest challenges. The other is age-old bureaucratic thinking. Red tape is a major factor to contend with and the plethora of laws, many outdated, and the tendency to stick to their letter rather than spirit in clearly changed circumstances causes frustration. For instance, environmental clearance for large projects and extremely outdated labour laws are holding back industrial progress in no small measure. Then of course there is there is the corruption to contend with.
Is all this not blunting India’s edge on catching up with China?
Of course it is. This is the utter failure of our successive governments. We are being turned into a high cost economy. China is continuously fine-tuning to reduce costs. Our costs are increasing – and for all sorts of irrational reasons.
Yet, there has been growth and millions of Indians are reportedly being alleviated from the clutches of poverty. But the rich-poor gap seems to exist as it always has been. Do you see that narrowing?
Narrowing, yes. Disappearing, no. Poverty and disparities are universal and simply can’t be wished away. They exist in every economy. You see it in the US, in Europe, everywhere. It’s the scale. In India everything is about the scale. So it all looks magnified. But yes, there are problems. Our political system is largely to blame. We have had a planning system for sixty years since independence. Just 10-12 per cent of planning expenditure is believed to have percolated down to the masses. You can imagine how much in terms of resources has been lost in the six decades – which is what is responsible largely for the poverty and lack of public infrastructure. Economic growth, however, will continue to lift millions of people out of the morass in coming years. But it is a long, hard, uphill road, everyone agrees.