In his theory of Mimesis, Plato says that all art is mimetic by nature; art is an imitation of life. He believed that the idea is the ultimate reality. Art imitates idea and so it is an imitation of reality. Aristotle, on the other hand, advocat- ed art as it is mimetic. According to him, art is an imitation of action and the artist’s tool of enquiry is neither philosophical nor moral. Philosophy apart, mimesis is widely prevalent as a survival tactic and the homo sapien has used it in his long evolution. All militaries recognise its importance and cam- ouflage and concealment are necessary tools for deception, central to all military strategy.
The art of camouflage and concealment are not only present in the military, they are present in all human endeavours, including in policy initiatives and business strategies. The Sino-Indian standoff at the LAC produced another sordid spectacle that showed India and its policymakers in poor light. While the military standoff between the IA and the PLA continues; BSNL a public sector undertaking under the Department Of Telecom(DoT), despite multiple GoI policy initiatives to promote indigenisation came out with a tender that specifically sought to eliminate Indian technology companies. On being rapped on the knuckles by the commerce ministry and threatened with crim- inal investigations, BSNL withdrew the tender. They then tried to choose the route of technology up-gradation of existing infrastructure from 2G to 4G to offer ZTE a Chinese company a role in it. The BSNL management and its supporters raised a storm in social media and also orchestrated a protest by their trade unions alleging discrimination w.r.t other telecom players. In this, they concealed some very important facts, that included the telecommunica- tions backbone for the military and many sensitive government departments exist on BSNL. They and the DoT also concealed that the existing Chinese equipment threatens the national security of the nation by giving the PLA the ability to snoop into military communications and disrupt them at will.
BSNL was never a market player dependant on market forces for its survival. In its long and storied history like many other PSUs, it has primarily relied on tax-payers largesse to rescue it. Historically the management and the politi- cal leadership of the day made hay by tweaking rules and policies to favour private corporations at the expense of BSNL. Very recently BSNL has come up with a VRS scheme paid for by the tax-payers that was open-ended rather than a limited offering to the deadwood to make the company a viable enterprise. This allowed the cream of their employees to take a golden hand- shake and join the private sector on hefty salaries and as an insider confid- ed; BSNL as an entity might collapse in 6 months by this exodus. Incompe- tence now has national security dimensions and is similar to the traitors of yore opening the doors to the fort in olden days.
With the global economies becoming decoupled, indigenisation in the sec- ondary and tertiary sectors have become the focus of attention. This has also become a necessity if India has to pursue the goals of better utilisation of its human resources. Presently India produces close to 900000 engineers each from all the universities both in the public and private sectors put to- gether. Barely a tenth of these land in jobs related to their education. De- spite this huge human resource availability, industrially India remains low in the list of the industrially self-sufficient nations. Instead, the country is tech- nology dependent on external sources. Since the first wave of industrial lib- eralisation was initiated, the intent was for an Indian leapfrog into the indus- trial big league of the world. Yet those attempts have only resulted in limited success, with import dependence increasing. The areas where India claim advances are in those dominated by the public sector like space and nuclear fields where foreign assistance is embargoed.
But the Indian private industry, while making an effort to rise to the demand, are overwhelmed by the flood of imports propelled by inverted tax structures and infrastructural handicaps. One of the few areas that India claimed tech- nology progress was in the Information Technology sector. However, even here fundamental questions remain. Indian IT in the private sector has ex- celled in the services sector providing human resources to overseas markets but has limited products and platforms having had no state backing.
Unlike, in the West, China, SE Asia or Russia, where indigenous technology companies received top priority, in India, this has never been accorded prior- ity. For instance, even in government sectors although there is an abundance of sloganeering, the reality is that few use Indian products. In India, the sin- gle largest driver of industrial demand is government, whether it is software or hardware. So when Russia produced, Yandex as a Google rival, India still does not have a domestically produced search engine. In Russia, Yandex is still the preferred search engine over Google or Yahoo or DuckDuckGo. Indi- an government officials including Ministers uses foreign social media plat- forms. This even though everybody is aware that the US National Security Agency has access to data warehoused in the US. The dangers of which is clear from scandals like Cambridge Analytica.
Calls for Atma Nirbharta, in these circumstances are welcome but will remain slogans until backed by credible policy initiatives that enable indigenisation. What constitutes an indigenous company needs to be clearly defined. Indi- genisation essentially implies using local materials and human resources. The core of indigenisation starts from the raw materials to the final finished product. Yet full indigenisation may be difficult to achieve in many sectors of industry. Raw materials still need to be imported and supply chains are largely globalised. Therefore full indigenisation of a complex product is not possible and in many cases not economical.
The second element of indigenisation is ownership. Is the majority ownership vested with the Indian or with foreign entities? If the facility is fully Indian owned but remains an assembly unit with no value addition in terms of IPR, the final product would still not be domestic. Unless import dependence is very low, the final output cannot be treated as indigenous. The best instance would be a comparison between the Tata Motors product and the Toyota Kir- loskar Motors. In the case of Tata Motors, majority ownership is Indian. Every component, beginning with the iron ore are all sourced indigenously. In the case of the Toyota, although there is a made in India label inside, the actual components are sourced by entities created in India separately for importing or assembling in India. The actual import component in a Tata Motors final product would at best be about 10 per cent and the design and engineering indigenous. In the case of the Japanese automaker, it could very well be the reverse or import component far higher. The design and engineering are largely Japanese.
However, in strategic sectors like telecom foreign companies have used in- genuity and legal engineering to subvert Indian laws. For instance during the 90s when cellular telecommunication services were exclusively reserved for domestic entities. Foreign companies used fronting as a method for captur- ing the domestic cellular market. Fronting was done by creating domestic private limited companies with majority ownership with the foreign entity. Al- ternatively, the foreign entity itself created a fully owned domestic entity as a private limited company. It is this domestic entity that in turn becomes a ma- jority stakeholder in the Indian venture a two-tiered or three-tiered venture. The first leg works as a Foreign company in India private ltd, The second leg is foreign company + Indian company Private limited. In telecom, there is usually a third tier where the equipment becomes a third country vendor. So instead of supplies coming directly from China, the source is sometimes Sri Lanka or any other source. The giveaways are usually the brand name and mostly the equipment designs.
Moreover, it is not just the secondary sectors of the economy that foreign en- tities dominate directly or indirectly. It is normally assumed that the primary sector – agriculture – is fully indigenous. Yet there is little truth in this. For in- stance, the seeds are provided by entities like Cargill and Monsanto through front companies. Secondly, all these seeds are fertiliser dependent for main- taining yields. Although the fertiliser is domestically produced, the feedstock, petroleum derivatives or liquefied natural gas for making the fertilisers are imported.
If indigenisation is taken up on a war footing, then it is obvious that the initia- tive would have to be government-driven. It does not though necessarily im- ply that government follow the public sector approach of the socialist era. Instead, it could also be the government remaining a minority stakeholder in strategic sectors of the economy or in sectors where there is high employ- ment potential with management control in private hands. For instance, in the US the haven of global capitalism, Lockheed or Grumman or Microsoft receives government support for preferential market access. US government supports both research, development and market access. China follows the same approach, the People’s Liberation Army is a stakeholder in most enti- ties of China and has handheld companies with espionage and state eco- nomic support to create world-class entities.
India has the largest youth bulge in human history. The pandemic has devas- tated not only the Indian economy but also the global economy. This offers a limited window to rapidly initiate policy course corrections that can handhold the rise of Indian companies and indigenous technologies. This will require not only a vision but education of the bureaucracy and citizenry on national interests. The lowest hanging fruit in this sector is the ICT industry. As in this sector, India has the largest world-class trained human resource. If properly incentivised they can use a very high percentage of the existing global hard- ware supply chains to rapidly create Indian owned, designed and engineered technologies to create Indian products. Increase of Indian hardware compo- nents can follow iteratively. The biggest dangers remain curated policymak- ing. BSNL is a sad example in this sordid saga. India can no longer afford this, as a young and aspirational generation looks for jobs. Not providing them job avenues can prove extremely costly and is along with our social cohesion the biggest danger to national security.