Power Plays: Business Implications of the Indo-U.S. Nuclear Deal
From: India Knowledge@Wharton Article , Aug 09, 2007 http://knowledge.wharton.upenn.edu/india/india/article.cfm?articleid=4217
On a flight to India five months ago, Wharton management professor Saikat Chaudhuri's co-passenger was a U.S.-based executive from General Electric, who was headed for talks with government officials in New Delhi. The executive had made numerous trips to India in the previous year, and he was also talking to several Indian states to explore deals to build nuclear and other power plants. "He was preparing for the market that would open up with the Indo-U.S. nuclear deal," says Chaudhuri.
That executive may have congratulated himself earlier this month when the two countries finally signed the deal -- called the "123 Agreement" because it falls under the U.S. Atomic Energy Act section of that number. Others may be cheering as well: Two big U.S. delegations -- representing 180 companies and 38 companies respectively -- visited India in the past year, looking to sell items such as Westinghouse nuclear reactors, uranium from South Dakota and Lockheed Martin fighter jets.
The agreement aims at ensuring U.S. support for India's civilian nuclear power program, with the promise of a significant jump in trade and business relations between the two countries. India will open its 14 civilian nuclear plants -- eight others are for military purposes -- to international inspection. Still, political groups in both countries threaten to block the deal, even as the emerging geopolitical realities and the economic benefits appear to outweigh the concerns. India Knowledge@Wharton spoke to corporate executives, analysts and Wharton faculty members to understand the business ramifications of the deal.
Staying Below the Radar
Initially, it appeared that most of the debates about the U.S.-India nuclear agreement were largely political. A deafening silence marked the business implications -- and with good reason: Many senior executives were waiting for the political clouds to clear and for the final terms of the agreement to be revealed. As GE India's CEO T.P. Chopra told India Knowledge@Wharton in an interview, the final form of the agreement would affect GE's nuclear power strategy in the country. Some business leaders point to other challenges. "First, some hurdles still remain," says the CEO of an Indian company that has been negotiating with U.S. firms for defense joint ventures. "The last thing we want is to give ammunition to the Left-wing parties. They would love to project the U.S. as greedy capitalists selling the country for a few dollars more. Business will keep silent until it's all signed, sealed and delivered." (The Congress Party-led Indian government depends on support from the Left, which has rejected the deal.)
Although the agreement is in its last lap, the consent of lawmakers in both India and the U.S. has to be secured. That is regarded as a formality, but adverse publicity could still affect the outcome. Also, an additional India-specific safeguards protocol will need to be signed with the International Atomic Energy Agency (IAEA) and the 45-nation Nuclear Suppliers Group (NSG) will need to approve the deal as well.
By the second week of August, however, a flurry of business moves has become evident. According to an August 9 Bloomberg News report, "Areva, the world's largest maker of nuclear power stations, and General Electric, are among four companies poised to share $14 billion of orders from India as nations led by the U.S. prepare to lift a 33-year ban. Toshiba's Westinghouse Electric and Russia's atomic energy agency Rosatom will probably also win contracts to each build two 1,000 megawatt reactors, according to Nuclear Power Corp. of India chairman S.K. Jain." The report noted India can begin purchasing equipment following NSG approval of the agreement.
Bloomberg added that "the orders will form the first phase of Prime Minister Manmohan Singh's plan to build 40,000 megawatts of nuclear capacity by 2020, equivalent to a third of current generation. India needs to add to the 3% of electricity that comes from Russian-designed reactors to meet soaring energy needs and reduce its reliance on coal-fired power plants." The report also quoted one source who said India would "try to diversify its suppliers and it's highly likely all four [Areva, GE, Westinghouse and Rosatom] will win the contracts."
Even so, the going will hardly be easy. Wharton management professor Jitendra Singh says one of the main hurdles the U.S. government faces is to ensure the deal survives any opposition from legislators. "Congress is on a collision course with the Bush administration right now," he says. "The odds are that they are not in a very cooperative state of mind." He feels the Democrats may not support the deal beyond a point. "That still leaves the challenge of getting the NSG to cooperate, and that may prove difficult as well."
A Symbolic Cachet
Notwithstanding the political test, Singh says the deal has "symbolic significance" and that "it may be remembered in time as a watershed event for India." He notes that for all the rhetoric about Pakistan being a major ally in the United States' war on terror, "the U.S. has refused point blank on any kind of parity between Pakistan and India in the nuclear domain." He attributes that stance to the fact that "India has always played by the rules, even though it was not a signatory to the NPT (Nuclear Non-Proliferation Treaty), whereas Pakistan has been a nuclear proliferator with supplies to Iran, Libya, North Korea and perhaps others."
Chaudhuri also feels the symbolic value of the deal is significant for long-term planning between the U.S. and India, "whereas in earlier years you had to always include a caveat" about how the relationship would evolve. "In the past, there has always been a certain amount of mistrust between the two countries, which has perhaps prevented closer ties and led to some political uncertainties over the last 20 to 30 years," he says. He now sees clear signals from the U.S. that it "wants to engage India" for both economic and geopolitical reasons.
For U.S. companies, multi-billion dollar opportunities are opening up. "It is not just in the nuclear area," says Shivanand Kanavi, a commentator on technology issues who is currently writing a book on India's nuclear program and is the author of Sand to Silicon, a book on the digital revolution. "There are opportunities at several levels and in several sectors."
One obvious opportunity is that U.S. companies will be allowed to sell both nuclear reactors and technology to India. This is big business -- roughly $150 billion worth, according to estimates from the U.S.-India Business Council (USIBC). The numbers are extrapolated from the Indian nuclear industry's plans to increase nuclear power output from around 3,500 MW now to 60,000 MW over the next three decades. The Atomic Energy Commission has doubled its target for 2024 from 20,000 MW to 40,000 MW. Nuclear energy today accounts for barely 3% of India's total generation of 120,000 MW.
A clear beneficiary of the new regime is the public-sector Nuclear Power Corporation of India (NPCIL) -- the entity negotiating the deals with Areva, GE, Westinghouse and Rosatom cited in the Bloomberg report.
Chaudhuri says that unlike telecommunications, roads and airports where India has been aggressively forging ahead, its energy sector "has not quite had that radical transformation yet." He expects the ramifications for Indian industry to be huge, by lowering infrastructure costs with increased supply of power.
Regulatory Bottlenecks
At the recent annual general meeting of Tata Power, the group's chairman, Ratan Tata, told shareholders: "If the government opens the sector for private investment, Tata Power would be certainly interested in operating a nuclear power plant." A critical challenge for businesses, however, will be securing the government's green light. Today, only companies with a 51% government stake are allowed to generate nuclear energy. In practice, this has boiled down to only NPCIL. Two years ago, the 89.5% government-owned National Thermal Power Corporation (NTPC) had approached NPCIL with a proposal that it enter the nuclear generation arena. But the talks have not made much headway. (Incidentally, NTPC shares rose on the release of the text of the 123 Agreement; NPCIL is not listed.)
For the private sector to enter the fray, the regulatory environment will need to change. In May, Atomic Energy Commission chairman Anil Kakodkar told a meeting in Kolkata (formerly Calcutta) that the Atomic Energy Act would be amended as soon as possible to allow private-sector participation. Draft legislation has already been circulated.
Apart from the Tatas, other interested parties will likely include the Anil Ambani-controlled Reliance Energy, the Essar Group and the GMR Group. Reliance has set up a "New Power Initiative" including senior executives from NPCIL. The Tata Group has also taken on board people with nuclear domain expertise.
Kanavi points out that U.S. companies helping to set up these plants will be looking to work with Indian contractors. Some of the contenders include: Larsen & Toubro (L&T), Hindustan Construction Company (HCC) and Gammon India in civil construction; L&T in reactors; Bharat Heavy Engineering Ltd (BHEL) in boilers; KSB, Kirloskar Brothers, Mather & Platt, Jyoti Ltd. and Bharat Pumps in boiler feed pumps; Alpha Laval, GEI Hammon Pipes, Maharashtra Seamless and Ratnamani Metals in heat exchangers; Honeywell Automation in panels; and Rolta India in consulting and engineering services. Some industry watchers also include Walchandnagar Industries, Godrej & Boyce, Bharat Heavy Plates & Vessels, the Hyderabad-based MTAR (which produces assemblies and precision components for use in space and nuclear applications), and Crompton Greaves.
Over the years that the Indian nuclear industry was shunned by the Western world, many of these companies have built up a good deal of expertise. HCC, for instance, was the first Indian construction company to undertake civil engineering works for pressurized heavy water reactor power projects in India. "HCC has constructed four out of the seven nuclear power plants in India," says chairman and managing director Ajit Gulabchand. Four new plants are under construction, with HCC building two of them.
"It is fast becoming accepted that nuclear energy is 'green' compared to conventional energy sources, and it is also quicker to implement," says Gulabchand. "There is a renewed global focus on building new capacities."
M.V. Kotwal, who heads the heavy engineering division of engineering giant L&T, now sees openings to set up "light water nuclear reactors of the boiling water type or the pressurized water type." He says the technology for such reactors, which need enriched uranium as fuel, is available with the U.S., France, Japan and Russia. Whereas L&T is equipped to manufacture the main reactor vessels as well as steam generators, pressurizers and other critical equipment for such nuclear power plants, "it is a problem at times to source some of the raw material which is manufactured by European, Japanese and Russian companies," says Kotwal. "After the clearance of the agreement, it will be easier to source such material and hence to speed up the Indian program."
Because of their extensive domestic experience and cost advantages, companies like L&T also plan to export nuclear reactor building skills and associated operation and maintenance services once the agreement is finalized.
Meanwhile, the perestroika in the nuclear arena will extend to exploration. The public-sector Uranium Corporation of India will be bidding for mines abroad. Meanwhile, at home, the private sector is being allowed into uranium exploration. For starters, the Department of Atomic Energy (DAE) will outsource areas like data collection and analysis.
Mega Defense Deals
All of this is, however, small change compared to defense deals, which have U.S. companies waiting anxiously. A conservative estimate says that India will spend $70 billion in defense procurement over the next five years. (The $150 billion estimated for nuclear power projects is spread over 28 years.)
Take just one component: fighter jets. India is in the market for 126 multi-role combat aircraft. At $10 billion, this is one of the world's biggest single-supplier contracts. New Delhi-based defense commentator Siddharth Srivastava wrote in an Asia Times article that the contenders are Boeing's F-18 Super Hornet, Lockheed Martin's F-16 Fighting Falcon, the Russian MiG-35, the Swedish SAAB Group's Jas-39, the Typhoon Eurofighter (the combined effort of British, German, Italian and Spanish firms), and the French Dassault Rafale.
The agreement will have spin-off benefits for Indian companies, as government regulations require foreign suppliers to invest 30% of deal values above $66 million in India's defense industry, wrote Srivastava. He points to Boeing's recent win of a $11 billion order for 68 aircraft from Air India, and its announcement that it would invest $1.7 billion to buy goods and services from Indian companies. Lockheed Martin has approached Hindustan Aeronautics, Bharat Electronics, BHEL, and the Tatas for joint defense projects, he adds.
Today, Russia is India's biggest defense supplier. Israel stands at No. 2, having overtaken France, the U.K. and the U.S., who had been hamstrung by various restrictions but now want part of the action. India this year expects to spend $10.5 billion on military equipment, including $4 billion for the air force, $2.8 billion for the army and $2.5 billion for the navy. Some 70% of those capital needs are met though imports.
The big Indian houses of Tata, Mahindra and Godrej are cobbling together consortia to bid for defense projects that may open up once the nuclear deal takes effect. L&T has already signed up with European aerospace and defense group EADS. Incidentally, L&T is planning to build submarines for the Indian Navy and has produced prototypes of products including missile launchers.
Indian business groups with defense expertise include Tata (electronic warfare systems, embedded software), Mahindra (simulators, surveillance systems), Ashok Leyland (transport/passenger vehicles, light armored trucks), Kirloskar (naval engines) and Bajaj Tempo (armored vehicles, components). Mahindra recently announced a marketing and support deal with Seabird Aviation Jordan to supply Seabird seeker aircraft to India. "This is a natural extension of our activities in the field of surveillance for which we have obtained a license from the government of India," says Brigadier (Retd.) K.A. Hai, CEO of Mahindra Defense Systems.
Another area where the nuclear agreement will make a difference is in space. "The deal will pave the way for lifting technology restriction regimes," says Kanavi. "One example: U.S. satellites or even satellites carrying U.S. components are not allowed to be launched by the Indian Space Research Organization. This might change and lead to India entering the business of space launches and satellite fabrication as a serious player. It has a price advantage of about 30% here due to the availability of high-skilled talent at low cost."
Economic Realities
"Ultimately, economics determines everything," says Chaudhuri, who feels those compulsions will override political opposition to the deal. To support that point, he says that despite widespread criticism of China's political system and its human rights issues, the U.S. business community is "very close to China." He says the Chinese government's investment in New York City-based private equity firm Blackstone "is very telling," as is also the recently embattled financial services giant Bear Stearns's attempt to rope in Chinese partners.
Chaudhuri adds that it is impressive that India "stuck to its guns" in the negotiations leading up to the nuclear deal, and also won the endorsement of its scientific establishment. "What's also interesting is that India is going to keep its options open and engage various countries, including Russia and China, at the geopolitical level," he says. "That's a new reality that has to be accepted by the rest of the world." The deal also sends a clear message to the U.S. that its "unilateral actions are probably bound not to be as effective any more," he says.
"There are some people who look askance at the 'sudden' emergence of India," Singh says. He argues that a longer-term historical perspective is needed, citing William Dalrymple's article in Time magazine's Asian edition on August 13, in which he says the notion of India as a poor country is of relatively recent origin, and that as late as 1700, it was one of the wealthiest regions of the world.
"It may be worth reminding ourselves that at one time India was called Sone ki Chidiya -- the Golden Bird," says Singh. "Maybe that was not just a flight of fancy after all. And India and China are simply heading back, in this post-Cold War, post-imperialism era, to their historically handsome share of world GDP and trade."
Tuesday, April 29, 2008
Book Review: Sand to Silicon, M V Kamath, Organiser
Veteran Journalist and former Chairman Prasar Bharti, Shri M V Kamath had these kind words to say in his review of my book Sand to Silicon in The Organiser
The miracle of digital tech
M.V. Kamath
Sand to Silicon: The amazing story of digital technology- Shivanand Kanavi, Rupa & Co. Delhi, pp 226, Rs. 395.00
On November 14, 2007 the media carried a story of the fourth fastest computer in the world, made in India. The super computer developed by the Tata Group's Pune-based Computational Research Laboratories (CRL), it was reported, was capable of a sustained speed of performance of 117.9 trillion floating operations per second (teraflops) and a peak speed of 170.9 teraflops and has been rated as the fourth fastest by the internationally recognised TOP 500 listing. This is the first time that an Indian High Performing Computer (HPC) has made it to the top, outdoing countries such as Japan, the United Kingdom and France. Now India joins the United States, Germany and Sweden to the Top Four.
According to a press release "the Super Computer built at the CRL facility marks a milestone in the Tata Group's effort at building an indigenous HPC solution". And Tata Group chairman, Shri Ratan Tata himself said that he is sure "this supercomputer and its successor systems will make a major contribution to India's ongoing scientific and technological initiatives". That was said modestly. May it be remembered that time was when the United States not only refused to provide India with a Supercomputer, but managed to persuade friendly countries not to help out India in its needs. Now India without any outside has triumphed. The Russians had been willing to sell the technology to India and had even signed an agreement with ISRO in 1992, but the US viciously invoked the Missile Technology Control Regime to bring pressure on Russia to deny India the technology. India should be grateful both to the US and Russia. It has learnt to stand on its own feet and thumb its nose at the Super Powers.
On January 21, 2008 India successfully placed an Israeli Spy Satellite in the polar orbit after what a news report said " a text-book launch" at Sriharikota Base. The Polar Satellite Launch Vehicle (PSLV-C 10) lifted off flawlessly from its launch pad, to the delight of its scientific fraternity. Now comes a report from Kochi that after the success of the Advanced Light Helicopter (ALH) produced by India, the country has decided to design and produce its own Light Observation Helicopter (LOH). Both the events are in many ways historic milestones in India's progress in the field of Science and Technology, but so little is know about the men who have made it to the top, Indians all, to their great pride.
It is not just in missilery that India is now to be counted. One has to read Shivanand Kanavi's fabulous book Sand to Silicon (Rupa and Co) to realise what fantastic contributions India has made in many other allied fields, but not necessarily within the Indian state boundaries. Think of Rajendra Singh, a wireless engineer and his wife Neera, a chemical engineer, now both living in the States. Singh hailed from a backward village, Kairoo, in Rajasthan which had neither electricity nor telephones. But he studied at Kanpur IIT, took a Ph.D in the States and he and his wife later became, according to Kanavi "the architects of most US cellular networks in the 1980s". In the 1990s, their consulting company spread its wings over 40 countries.
Who invented fibre optics? An Indian called Narindra Singh Kapanny. He was also the first to introduce lasers for eye surgery. Then there is C.K.N. Patel who won the prestigious National Medal of Science in the US in 1996 for his invention of the Carbon Dioxide Laser, the first Laser with high power applications, way back in 1964 at the Bell Laboratories. But how many in India know that? How many, for that matter, know that prototypes of personal computers were being made in India as far back as in the 1970s which were "as sophisticated as those being developed in the Silicon Valley"?
Apparently the Indian Government discouraged development of these PCs for some unknown reason. Kanavi mentions the name of Vinod Dham who led a project that created the Pentium, the most successful Intel Chip today. Then Kanavi mentions other names of Indians who played a pioneering role in developing design tools, names such as Raj Singh, Suhas Patel and Prabhu Goel.
The one dominant feature of Indians, according to educationists, is their grasp of mathematics. Kanavi remembers that on August 8, 2002, Manindra Agrawal, a faculty member at IIT Kanpur and two under-graduate students Neeraj Kayal and Nitin Saxena, hit the headlines in, of all papers, The New York Times, a rare happening for any group of scientists, when they announced a research paper that they had solved the centuries-old problem of a test for the prime nature of numbers. So good are Indians at mathematics.
Actually, in the early 80s, a young electrical engineer at Bell Labs, Narendra Karmarkar was able to find a method, using highly complex mathematics to speed up many problems in linear programming. The Integrated Gate Bipolar Transistors or IGDT had, as a co-inventor, an Indian, Jayant Baliga. Then we have Sorab Gandhi who did pioneering work in Gallium Arsenide in 1960s and 1970s, making compound semi-conductors possible. Umesh Mishra of the University of California at the Santa Barbara is quoted as saying that tomorrow's lighting might come from semi-conductor like Gallium Nitride.
According to Mishra "a normal incandescent bulb lasts about 1,000 hours and a tubelight lasts 10,000 hours but a Gallium Nitride Light-Emitting Diode display can last 100,000, hours while consuming little power. Though many in India have heard of Sam Pitroda, few know that he is the inventor of the digital diary, that handy gizmo which helps one store schedules, addresses, telephone numbers and e-mail addresses. With models available at less than $ 100 each, the Personal Digital Assistants (PDAs) are fast proliferating among travellers and executives. These PDAs, according to Kanavi, not only store addresses and appointments, they also contain digital scratch pads and can access e-mail through wireless Internet!
One has to read Kanavi's fascinating account to realise what tremendous scientific progress Indians have achieved. His book is reader-friendly and is written in language that anyone unfamiliar with technical words can understand. That, indeed is its uniqueness. There hasn't been another work like this and it raises our pride in being Indians! It is no easy task to make complex scientific concepts understandable even to the technologically unsophisticated but this is where Kanavi has succeeded. Kudos to him.
(Rupa & Co., 7/16, Ansari Road, Darya Ganj, New Delhi-110 002.)
Courtesy: http://www.organiser.org/, March 09, 2008
The miracle of digital tech
M.V. Kamath
Sand to Silicon: The amazing story of digital technology- Shivanand Kanavi, Rupa & Co. Delhi, pp 226, Rs. 395.00
On November 14, 2007 the media carried a story of the fourth fastest computer in the world, made in India. The super computer developed by the Tata Group's Pune-based Computational Research Laboratories (CRL), it was reported, was capable of a sustained speed of performance of 117.9 trillion floating operations per second (teraflops) and a peak speed of 170.9 teraflops and has been rated as the fourth fastest by the internationally recognised TOP 500 listing. This is the first time that an Indian High Performing Computer (HPC) has made it to the top, outdoing countries such as Japan, the United Kingdom and France. Now India joins the United States, Germany and Sweden to the Top Four.
According to a press release "the Super Computer built at the CRL facility marks a milestone in the Tata Group's effort at building an indigenous HPC solution". And Tata Group chairman, Shri Ratan Tata himself said that he is sure "this supercomputer and its successor systems will make a major contribution to India's ongoing scientific and technological initiatives". That was said modestly. May it be remembered that time was when the United States not only refused to provide India with a Supercomputer, but managed to persuade friendly countries not to help out India in its needs. Now India without any outside has triumphed. The Russians had been willing to sell the technology to India and had even signed an agreement with ISRO in 1992, but the US viciously invoked the Missile Technology Control Regime to bring pressure on Russia to deny India the technology. India should be grateful both to the US and Russia. It has learnt to stand on its own feet and thumb its nose at the Super Powers.
On January 21, 2008 India successfully placed an Israeli Spy Satellite in the polar orbit after what a news report said " a text-book launch" at Sriharikota Base. The Polar Satellite Launch Vehicle (PSLV-C 10) lifted off flawlessly from its launch pad, to the delight of its scientific fraternity. Now comes a report from Kochi that after the success of the Advanced Light Helicopter (ALH) produced by India, the country has decided to design and produce its own Light Observation Helicopter (LOH). Both the events are in many ways historic milestones in India's progress in the field of Science and Technology, but so little is know about the men who have made it to the top, Indians all, to their great pride.
It is not just in missilery that India is now to be counted. One has to read Shivanand Kanavi's fabulous book Sand to Silicon (Rupa and Co) to realise what fantastic contributions India has made in many other allied fields, but not necessarily within the Indian state boundaries. Think of Rajendra Singh, a wireless engineer and his wife Neera, a chemical engineer, now both living in the States. Singh hailed from a backward village, Kairoo, in Rajasthan which had neither electricity nor telephones. But he studied at Kanpur IIT, took a Ph.D in the States and he and his wife later became, according to Kanavi "the architects of most US cellular networks in the 1980s". In the 1990s, their consulting company spread its wings over 40 countries.
Who invented fibre optics? An Indian called Narindra Singh Kapanny. He was also the first to introduce lasers for eye surgery. Then there is C.K.N. Patel who won the prestigious National Medal of Science in the US in 1996 for his invention of the Carbon Dioxide Laser, the first Laser with high power applications, way back in 1964 at the Bell Laboratories. But how many in India know that? How many, for that matter, know that prototypes of personal computers were being made in India as far back as in the 1970s which were "as sophisticated as those being developed in the Silicon Valley"?
Apparently the Indian Government discouraged development of these PCs for some unknown reason. Kanavi mentions the name of Vinod Dham who led a project that created the Pentium, the most successful Intel Chip today. Then Kanavi mentions other names of Indians who played a pioneering role in developing design tools, names such as Raj Singh, Suhas Patel and Prabhu Goel.
The one dominant feature of Indians, according to educationists, is their grasp of mathematics. Kanavi remembers that on August 8, 2002, Manindra Agrawal, a faculty member at IIT Kanpur and two under-graduate students Neeraj Kayal and Nitin Saxena, hit the headlines in, of all papers, The New York Times, a rare happening for any group of scientists, when they announced a research paper that they had solved the centuries-old problem of a test for the prime nature of numbers. So good are Indians at mathematics.
Actually, in the early 80s, a young electrical engineer at Bell Labs, Narendra Karmarkar was able to find a method, using highly complex mathematics to speed up many problems in linear programming. The Integrated Gate Bipolar Transistors or IGDT had, as a co-inventor, an Indian, Jayant Baliga. Then we have Sorab Gandhi who did pioneering work in Gallium Arsenide in 1960s and 1970s, making compound semi-conductors possible. Umesh Mishra of the University of California at the Santa Barbara is quoted as saying that tomorrow's lighting might come from semi-conductor like Gallium Nitride.
According to Mishra "a normal incandescent bulb lasts about 1,000 hours and a tubelight lasts 10,000 hours but a Gallium Nitride Light-Emitting Diode display can last 100,000, hours while consuming little power. Though many in India have heard of Sam Pitroda, few know that he is the inventor of the digital diary, that handy gizmo which helps one store schedules, addresses, telephone numbers and e-mail addresses. With models available at less than $ 100 each, the Personal Digital Assistants (PDAs) are fast proliferating among travellers and executives. These PDAs, according to Kanavi, not only store addresses and appointments, they also contain digital scratch pads and can access e-mail through wireless Internet!
One has to read Kanavi's fascinating account to realise what tremendous scientific progress Indians have achieved. His book is reader-friendly and is written in language that anyone unfamiliar with technical words can understand. That, indeed is its uniqueness. There hasn't been another work like this and it raises our pride in being Indians! It is no easy task to make complex scientific concepts understandable even to the technologically unsophisticated but this is where Kanavi has succeeded. Kudos to him.
(Rupa & Co., 7/16, Ansari Road, Darya Ganj, New Delhi-110 002.)
Courtesy: http://www.organiser.org/, March 09, 2008
Thursday, April 3, 2008
Peepul ke Neeche--Conversations
Ghadar Jari Hai, Vol 2, No. 1, Jan-March 2008
Delhi: 1857
We present a freewheeling discussion between Mahmood Farooqui and Shivanand, regarding Delhi around 1857. Mahmood is a historian, who has extensively studied archival material in Urdu regarding 1857 and particularly about the uprising in Delhi. He is currently writing a book on Delhi in 1857. He has also studied the vanished performing art of ‘Dastaangoi’. He has tried to revive the form by putting up a series of performances as well.
Shivanand: Let us start with some basic information about Delhi of those days, like population, geographical extent, political and cultural life
Mahmood Farooqui: By 1857 Delhi’s population was about a lakh of people and it was surrounded by the outer walls of the city built by Shahjahan, that is Shajahanabad, with 12 gates; Ajmeri gate, Kabuli gate, Lahori gate, Kashmiri gate etc. Delhi had many cities before like Mehruali, Kilokari, Tughlakabad etc. A few new settlements had come up. Outside Paharganj thana, subji mandi etc, also near Mehrauli, near Nizamuddin, a settlement near Badarpur etc.
The city was almost equally divided between Hindus and Muslims with some Jains. The court was a centre for certain kind of culture; for production of Urdu poetry, and music. The city had its own autonomous existence not revolving around the court. The king was fondly looked upon. A lot of Urdu poets congregated around him since he himself was one, but it was not as if he commanded the city’s culture and people had mushairas in houses etc.
From 1830-35 there was the experiment of Delhi College which taught European science in Indian language (Urdu), English was a subject they studied. Master Ramachand was a great mathematician of Delhi College who later converted to Christianity. Zakaullah, Sir Syed studied there and so on. There was a rise of a new kind of intellectual in Delhi. In Calcutta also it happened, but in Delhi it was different, because here they were supremely confident of their cultural self. Acquiring new knowledge but confident of what he had already. There was an intellectual efflorescence based on enquiry. Among Muslims there was religious activity based on followers of Shah Waliullah in Madarasa Rahimiya. The English called them Wahabis. However there were no Wahabis in India who were with Abdul Wahab of Saudi Arabia. These were not Wahabis but Waliullahis, who were engaged in resurgence and rebuilding and contesting English claims. Some of them like Syed Ahmed Shahid, Shah Ismail and so on, actually went out to fight a jihad against the English and only against the English not against Sikh rulers or Hindus or anyone else. Rahimiya madrasa was also a new kind of institution because it used print to propagate its views, to debate with English missionaries, to convert etc.
Was it just a theological seminary or were there other braches of knowledge like medicine, mathematics?
Standard madrasa then was based on a watered down Aristotelian system: works of logic based on Greek philosophy, some mathematics etc it was not just theology it depended also a lot on the teachers. It was not standardised and it could vary. So and so might be very good in Arabic theory or Persian prose so people went to study under him. It was like a gurukul, centred around the reputation of the guru. This was the intellectual ferment in the city.
The city had a lot of Muslim Punjabi merchants who had interest in the religious debate that was going on. There were also a lot of Khatris in the city and of course the English presence was there; the magistracy, the courts and the settlement in civil lines, which was coming up and the English were very much at home among the elite society of Delhi. That is why Ghalib had so many English friends and there were Englishmen writing in Urdu etc. This essentially was Delhi on the eve of 1857.
How was the administration organised? Was it mixed British and Mughal ?
I have tried to investigate it but a lot of administrative records of the time are not available in the national archives. For example, I could not ascertain who the police were reporting to? Judiciary was English but with the cooperation of Indians and they were using mixed laws. Criminal law was Islamic and civil was mixed. The postal system was under British control. There was revenue collection from principalities around Delhi by the English. There were seven of them in Pataudi, Dujana, Ballabgarh, Bahadurgarh, Jhajjar and two more. The wider hinterland was governed by tahsildars appointed by the English. The king, Bahadurshah Zafar was a pensioner and had revenues from some villages and rent from some shops in the city.
To give a little background, in 1761 Shah Alam the Mughal prince who was living outside of Delhi (Delhi was in anarchy), fought along with Nawab Shujauddaulah of Awadh, the Battle of Buxar against the English and lost it. So he and Shujauddaulah had to cede some rights to the English. After meandering for sometime in Allahabad etc he came to Delhi. He began to live under the protection of Mahadji Scindia, who was then controlling Delhi, around 1780. Then in 1803 British marched westwards and defeated the Marathas in the battle of Patparganj and the Mughal king came under the protection of English. The King became a pensioner of the English with increasing interference from the English in his rights and privileges. He died in 1837 and Bahadurshah then became the king. By then the English were even trying to interfere with the protocol and who will succeed etc. Clearly, Bahadurshah knew that he probably would be the last in Mughal lineage.
It is said frequently that Zafar was a reluctant leader and it was thrust upon him etc. At the same time the firman issued by Zafar on 12th May displays a lot of sagacity and well thought out statecraft. So what was his role and that of other members of his family?
There was a great deal of commotion in the city on the day that the soldiers arrived from Meerutt. Meanwhile some soldiers reached Bahadurshah and told him ‘come lead us we will win all of Hindustan for you’. His chief advisor, his hakim, was very reluctant and remained sceptical right through. He said, “these soldiers have turned against their masters do not depend on them”. However, the king did not commit to anything. The soldiers were hungry. They did not speak with one voice. Some were even disrespecting. Some pulled his beard and said ‘ye buddhe, come and fight’. They looked down upon royalty. They felt the royalty are useless people, where as soldiers were fighting for the country.
However, what he did the next day is very intriguing. He wrote a letter to all the Rajputana princes to come and help him fight. He would not have done so unless he was sure that these soldiers were going to stick around. If he were taken by surprise, he would wait and see. There is something there, which I have not figured out.
However, the princes were very popular with the army. That tells us something. They would not be so unless they were very much active against the English. Mirza Mughal was made the Commander In Chief at the insistence of the army. He was very influential. There were two or three other princes who were also active. Firoz Shah had gone to Haj and when he came back, he went directly to Awadh and fought. He was not Bahadurshah’s son.
What was the ‘court of mutineers’?
It was formed sometime in early July. I saw a document, which says Court of Administration qayam kiya jaata hai. Then it goes on to explain its composition and constitution (dastavez); two members from cavalry, infantry and artillery and four civilians with the Commander in Chief acting as the president; voting by majority; in case of disputes the matter to be referred to the king. If the king disagrees with the court about any matter then it will be discussed again in the court and if they do not change and decide to stick by their decision then it would be binding on the king and so on. They dealt with administration, finance, everything. Similar courts were formed in Lucknow, Kanpur and even Jhansi. Soldiers insisted on this and even though we only remember the royal leaders, everywhere they were circumscribed by these courts of soldiers. They often mistrusted the old rulers. They did not want the old to dominate. They clearly wanted a consultative role, a republican concept of governance.
Most orders are coming from CIC, but even the CIC is questioned, e.g. there is a note from the accountant to the CIC that how is the expenditure on the elephant used by CIC to be accounted for. He says the court will not accept it as a military expenditure. Then the CIC says do not put that in the account. I will speak to the members of the court and then see who should pay. This is a month later. So obviously the court was very important and hovering behind every order of CIC. For example there is a letter from a spy, which says, ‘the soldier’s court met and they denounced the officers and said these guys do not want to fight, they are pilfering our money and promoting their favourites. Today we are dismissing all of them and taking over and so on.’
What was the role of Bakht Khan?
Before Bakht Khan’s arrival with the Bareily contingent, every new group of soldiers that arrived went to the Ridge first, fought with great valour and then came to the city and settled down. In between there is bhang and courtesans and so on. When Bakht Khan came in early July, he introduced a great amount of vigour. He superseded Mirza Mughal and he was appointed the Lord Governor by the King, since Bahadurshah trusted him. He was close to Moulvi Sarfaraz Ali who was the leader of Mujahideens (they came for jehad against the English and other volunteers). Bakht Khan organised proper battles by turns, he also organised salary distribution, tax collection etc. But there was rivalry between him and Mirza Mughal. In about a month he started losing steam. There was no unified command; soldiers were loyal to their own regiment. There was also a lot of rivalry between the Bareily and Neemuch contingents. Bakht Khan decided to go and attack the English from behind and cut off the supplies from Punjab. It was an obvious thing to do, but no one had thought of it. However, in the battle he refused to help the Neemuch brigade led by Sidhara Singh and Hira Singh for which he was reprimanded by the King. But Bakht Khan said I am not anybody’s naukar to go and help anybody.
There was no proper hinterland for supplies. There is shortage of sulphur of vegetables of atta and almost everything else. The thanedars were then asked to organise supplies and they managed to do so. Over all what is significant is not that they lost but they held out for four months under these circumstances!
What would you consider as the major cause of defeat at Delhi? Also supposedly Bakht Khan asked Zafar to leave Delhi with the soldiers but Zafar refused to do so. Why was that?
You have to see it from Bahadurshah’s point of view. What he saw was infighting and indiscipline. They were not fighting under unified command. A number of times he said “I am leaving Delhi I am going to the shrine in Mehrauli, I will go for Haj, I will commit suicide” and so on. He was trying to use many stratagems to bring them under control. Bakht Khan was brave and a great strategist but had failed to bring Delhi under unified command. He also did not go and help Hira Singh and Sidhara Singh at a critical point. The situation worsened. Soldiers were coming into deewan e khas with shoes on, sometimes with their horses and arms etc. This had not happened even in the times of Nadir Shah or even English.
Therefore, he had many reasons to be unhappy with the soldiers. Zafar fighting from Delhi was potent but Zafar fighting from elsewhere would not matter much. He knew that the dynasty is over. He did not expect to be spared by the British.
What role did religion play in Delhi during 1857?
There was an enormous amount of religious rhetoric. The firmans and the press kept saying ‘protect deen-dharam’. They were openly inciting people against the English using religion. There is nothing wrong with that. I do not know how Prof Irfan Habib says that religion did not play a role in 1857. They were creating a constituency for war in people’s mind. Not that religion was very important to these soldiers, after all they were using the same cartridges which are supposed to be coated with animal fat. Second thing is the appeal for Hindu-Muslim unity. This was the first time that Indians themselves created two categories of Hindus and Muslims. ‘India is where both Hindus and Muslims live’. This is not self evident. It was created in 1857. The whole secular nationalism still talks about unity of Hindus and Muslims. Why don’t they talk of India as a land of taluqdars and peasants or of five rivers etc? The people did not see themselves as Hindus and Muslims but 1857 made them think so. These are not descriptive categories but constitutive categories.
It made everybody into Hindus and Muslims. We should question this construct. While we laud 1857, we should note that it essentialised us as Hindus and Muslims. There are all kinds of ways India can be seen.
After 1857, we started fighting Europe on its terms. During 1857, we fought Europe on our own philosophical and epistemological grounds.
Can you comment on the need to study 1857 today?
There was wide spread resentment against the British and hence there was support for the Ghadar even among those who did not take up arms or contribute monies. That is why we should not study 1857 in terms of victory and defeat but in terms of sentiments. We have only asked nationalistic questions in studying 1857. Do we study 1857 for Indian bravery, for military strategy for nationalism? If we do, we would be disappointed. We will only see English triumphalism. Not all patriotic struggles need be nationalistic struggles. We need to ask more intelligent questions. The soldiers became radical. Why did this not proceed further? Why are there no accounts of julahas (weavers) of Allahabad fighting. What was Kunwar Singh inspired by, what was Tatya Tope inspired by and so on. There should be monographs on Kanpur, on Lucknow or even Deccan and so on. Let us depict what actually happened.
Mahmood, your book on Delhi would be looked forward to and I hope there will be more such empirical studies instead of tepid and simplistic accounts. Thank you.
(Ghadar Jari Hai is a quarterly magazine produced from New Delhi, India. For more information write to S Raghavan, Editor, jaarihai@yahoo.co.in)
Delhi: 1857
We present a freewheeling discussion between Mahmood Farooqui and Shivanand, regarding Delhi around 1857. Mahmood is a historian, who has extensively studied archival material in Urdu regarding 1857 and particularly about the uprising in Delhi. He is currently writing a book on Delhi in 1857. He has also studied the vanished performing art of ‘Dastaangoi’. He has tried to revive the form by putting up a series of performances as well.
Shivanand: Let us start with some basic information about Delhi of those days, like population, geographical extent, political and cultural life
Mahmood Farooqui: By 1857 Delhi’s population was about a lakh of people and it was surrounded by the outer walls of the city built by Shahjahan, that is Shajahanabad, with 12 gates; Ajmeri gate, Kabuli gate, Lahori gate, Kashmiri gate etc. Delhi had many cities before like Mehruali, Kilokari, Tughlakabad etc. A few new settlements had come up. Outside Paharganj thana, subji mandi etc, also near Mehrauli, near Nizamuddin, a settlement near Badarpur etc.
The city was almost equally divided between Hindus and Muslims with some Jains. The court was a centre for certain kind of culture; for production of Urdu poetry, and music. The city had its own autonomous existence not revolving around the court. The king was fondly looked upon. A lot of Urdu poets congregated around him since he himself was one, but it was not as if he commanded the city’s culture and people had mushairas in houses etc.
From 1830-35 there was the experiment of Delhi College which taught European science in Indian language (Urdu), English was a subject they studied. Master Ramachand was a great mathematician of Delhi College who later converted to Christianity. Zakaullah, Sir Syed studied there and so on. There was a rise of a new kind of intellectual in Delhi. In Calcutta also it happened, but in Delhi it was different, because here they were supremely confident of their cultural self. Acquiring new knowledge but confident of what he had already. There was an intellectual efflorescence based on enquiry. Among Muslims there was religious activity based on followers of Shah Waliullah in Madarasa Rahimiya. The English called them Wahabis. However there were no Wahabis in India who were with Abdul Wahab of Saudi Arabia. These were not Wahabis but Waliullahis, who were engaged in resurgence and rebuilding and contesting English claims. Some of them like Syed Ahmed Shahid, Shah Ismail and so on, actually went out to fight a jihad against the English and only against the English not against Sikh rulers or Hindus or anyone else. Rahimiya madrasa was also a new kind of institution because it used print to propagate its views, to debate with English missionaries, to convert etc.
Was it just a theological seminary or were there other braches of knowledge like medicine, mathematics?
Standard madrasa then was based on a watered down Aristotelian system: works of logic based on Greek philosophy, some mathematics etc it was not just theology it depended also a lot on the teachers. It was not standardised and it could vary. So and so might be very good in Arabic theory or Persian prose so people went to study under him. It was like a gurukul, centred around the reputation of the guru. This was the intellectual ferment in the city.
The city had a lot of Muslim Punjabi merchants who had interest in the religious debate that was going on. There were also a lot of Khatris in the city and of course the English presence was there; the magistracy, the courts and the settlement in civil lines, which was coming up and the English were very much at home among the elite society of Delhi. That is why Ghalib had so many English friends and there were Englishmen writing in Urdu etc. This essentially was Delhi on the eve of 1857.
How was the administration organised? Was it mixed British and Mughal ?
I have tried to investigate it but a lot of administrative records of the time are not available in the national archives. For example, I could not ascertain who the police were reporting to? Judiciary was English but with the cooperation of Indians and they were using mixed laws. Criminal law was Islamic and civil was mixed. The postal system was under British control. There was revenue collection from principalities around Delhi by the English. There were seven of them in Pataudi, Dujana, Ballabgarh, Bahadurgarh, Jhajjar and two more. The wider hinterland was governed by tahsildars appointed by the English. The king, Bahadurshah Zafar was a pensioner and had revenues from some villages and rent from some shops in the city.
To give a little background, in 1761 Shah Alam the Mughal prince who was living outside of Delhi (Delhi was in anarchy), fought along with Nawab Shujauddaulah of Awadh, the Battle of Buxar against the English and lost it. So he and Shujauddaulah had to cede some rights to the English. After meandering for sometime in Allahabad etc he came to Delhi. He began to live under the protection of Mahadji Scindia, who was then controlling Delhi, around 1780. Then in 1803 British marched westwards and defeated the Marathas in the battle of Patparganj and the Mughal king came under the protection of English. The King became a pensioner of the English with increasing interference from the English in his rights and privileges. He died in 1837 and Bahadurshah then became the king. By then the English were even trying to interfere with the protocol and who will succeed etc. Clearly, Bahadurshah knew that he probably would be the last in Mughal lineage.
It is said frequently that Zafar was a reluctant leader and it was thrust upon him etc. At the same time the firman issued by Zafar on 12th May displays a lot of sagacity and well thought out statecraft. So what was his role and that of other members of his family?
There was a great deal of commotion in the city on the day that the soldiers arrived from Meerutt. Meanwhile some soldiers reached Bahadurshah and told him ‘come lead us we will win all of Hindustan for you’. His chief advisor, his hakim, was very reluctant and remained sceptical right through. He said, “these soldiers have turned against their masters do not depend on them”. However, the king did not commit to anything. The soldiers were hungry. They did not speak with one voice. Some were even disrespecting. Some pulled his beard and said ‘ye buddhe, come and fight’. They looked down upon royalty. They felt the royalty are useless people, where as soldiers were fighting for the country.
However, what he did the next day is very intriguing. He wrote a letter to all the Rajputana princes to come and help him fight. He would not have done so unless he was sure that these soldiers were going to stick around. If he were taken by surprise, he would wait and see. There is something there, which I have not figured out.
However, the princes were very popular with the army. That tells us something. They would not be so unless they were very much active against the English. Mirza Mughal was made the Commander In Chief at the insistence of the army. He was very influential. There were two or three other princes who were also active. Firoz Shah had gone to Haj and when he came back, he went directly to Awadh and fought. He was not Bahadurshah’s son.
What was the ‘court of mutineers’?
It was formed sometime in early July. I saw a document, which says Court of Administration qayam kiya jaata hai. Then it goes on to explain its composition and constitution (dastavez); two members from cavalry, infantry and artillery and four civilians with the Commander in Chief acting as the president; voting by majority; in case of disputes the matter to be referred to the king. If the king disagrees with the court about any matter then it will be discussed again in the court and if they do not change and decide to stick by their decision then it would be binding on the king and so on. They dealt with administration, finance, everything. Similar courts were formed in Lucknow, Kanpur and even Jhansi. Soldiers insisted on this and even though we only remember the royal leaders, everywhere they were circumscribed by these courts of soldiers. They often mistrusted the old rulers. They did not want the old to dominate. They clearly wanted a consultative role, a republican concept of governance.
Most orders are coming from CIC, but even the CIC is questioned, e.g. there is a note from the accountant to the CIC that how is the expenditure on the elephant used by CIC to be accounted for. He says the court will not accept it as a military expenditure. Then the CIC says do not put that in the account. I will speak to the members of the court and then see who should pay. This is a month later. So obviously the court was very important and hovering behind every order of CIC. For example there is a letter from a spy, which says, ‘the soldier’s court met and they denounced the officers and said these guys do not want to fight, they are pilfering our money and promoting their favourites. Today we are dismissing all of them and taking over and so on.’
What was the role of Bakht Khan?
Before Bakht Khan’s arrival with the Bareily contingent, every new group of soldiers that arrived went to the Ridge first, fought with great valour and then came to the city and settled down. In between there is bhang and courtesans and so on. When Bakht Khan came in early July, he introduced a great amount of vigour. He superseded Mirza Mughal and he was appointed the Lord Governor by the King, since Bahadurshah trusted him. He was close to Moulvi Sarfaraz Ali who was the leader of Mujahideens (they came for jehad against the English and other volunteers). Bakht Khan organised proper battles by turns, he also organised salary distribution, tax collection etc. But there was rivalry between him and Mirza Mughal. In about a month he started losing steam. There was no unified command; soldiers were loyal to their own regiment. There was also a lot of rivalry between the Bareily and Neemuch contingents. Bakht Khan decided to go and attack the English from behind and cut off the supplies from Punjab. It was an obvious thing to do, but no one had thought of it. However, in the battle he refused to help the Neemuch brigade led by Sidhara Singh and Hira Singh for which he was reprimanded by the King. But Bakht Khan said I am not anybody’s naukar to go and help anybody.
There was no proper hinterland for supplies. There is shortage of sulphur of vegetables of atta and almost everything else. The thanedars were then asked to organise supplies and they managed to do so. Over all what is significant is not that they lost but they held out for four months under these circumstances!
What would you consider as the major cause of defeat at Delhi? Also supposedly Bakht Khan asked Zafar to leave Delhi with the soldiers but Zafar refused to do so. Why was that?
You have to see it from Bahadurshah’s point of view. What he saw was infighting and indiscipline. They were not fighting under unified command. A number of times he said “I am leaving Delhi I am going to the shrine in Mehrauli, I will go for Haj, I will commit suicide” and so on. He was trying to use many stratagems to bring them under control. Bakht Khan was brave and a great strategist but had failed to bring Delhi under unified command. He also did not go and help Hira Singh and Sidhara Singh at a critical point. The situation worsened. Soldiers were coming into deewan e khas with shoes on, sometimes with their horses and arms etc. This had not happened even in the times of Nadir Shah or even English.
Therefore, he had many reasons to be unhappy with the soldiers. Zafar fighting from Delhi was potent but Zafar fighting from elsewhere would not matter much. He knew that the dynasty is over. He did not expect to be spared by the British.
What role did religion play in Delhi during 1857?
There was an enormous amount of religious rhetoric. The firmans and the press kept saying ‘protect deen-dharam’. They were openly inciting people against the English using religion. There is nothing wrong with that. I do not know how Prof Irfan Habib says that religion did not play a role in 1857. They were creating a constituency for war in people’s mind. Not that religion was very important to these soldiers, after all they were using the same cartridges which are supposed to be coated with animal fat. Second thing is the appeal for Hindu-Muslim unity. This was the first time that Indians themselves created two categories of Hindus and Muslims. ‘India is where both Hindus and Muslims live’. This is not self evident. It was created in 1857. The whole secular nationalism still talks about unity of Hindus and Muslims. Why don’t they talk of India as a land of taluqdars and peasants or of five rivers etc? The people did not see themselves as Hindus and Muslims but 1857 made them think so. These are not descriptive categories but constitutive categories.
It made everybody into Hindus and Muslims. We should question this construct. While we laud 1857, we should note that it essentialised us as Hindus and Muslims. There are all kinds of ways India can be seen.
After 1857, we started fighting Europe on its terms. During 1857, we fought Europe on our own philosophical and epistemological grounds.
Can you comment on the need to study 1857 today?
There was wide spread resentment against the British and hence there was support for the Ghadar even among those who did not take up arms or contribute monies. That is why we should not study 1857 in terms of victory and defeat but in terms of sentiments. We have only asked nationalistic questions in studying 1857. Do we study 1857 for Indian bravery, for military strategy for nationalism? If we do, we would be disappointed. We will only see English triumphalism. Not all patriotic struggles need be nationalistic struggles. We need to ask more intelligent questions. The soldiers became radical. Why did this not proceed further? Why are there no accounts of julahas (weavers) of Allahabad fighting. What was Kunwar Singh inspired by, what was Tatya Tope inspired by and so on. There should be monographs on Kanpur, on Lucknow or even Deccan and so on. Let us depict what actually happened.
Mahmood, your book on Delhi would be looked forward to and I hope there will be more such empirical studies instead of tepid and simplistic accounts. Thank you.
(Ghadar Jari Hai is a quarterly magazine produced from New Delhi, India. For more information write to S Raghavan, Editor, jaarihai@yahoo.co.in)
Saturday, February 16, 2008
Book Review: 1857, V D Savarkar
Ghadar Jari Hai, Vol. 1, No.2, August 15, 2007
Book Review
The legendary history of 1857
Shivanand Kanavi
Vinayak Damodar Savarkar’s book, “The Indian war of independence 1857” is a truly legendary book. In both senses of the word.
The book itself has achieved a legendary status in the last hundred years since its first publication. The book showed up the censors in England for what they were, when they took the unprecedented step of banning it before it was even published. Thus it was a remarkable enterprise, in which many patriots participated, to enable the book to see the light of the day. Lala Hardayal, professor at University of California at Berkeley and founder of the famous Hindusthani Ghadar Party reprinted it in 1912 to make it available to a larger audience and Bhagat Singh and his associates also found it worthwhile to publish it again in India later. It is a pity that no publisher has thought it fit to reprint it in this 150th anniversary year of the Great Ghadar, when old books are being reprinted and new ones being churned out. It is heartening that most booksellers are reporting a lot of interest in books on 1857 among the reading public.
It is intriguing that a nation that groaned under colonial yoke for 200 years and whose pre-colonial past is glorified by some and decried by others but researched and documented in only a fragmentary fashion. We continue to be indifferent to re-discovering ourself even after gaining political independence. Our schoolteachers rarely take students to museums or monuments and do not teach history in a living fashion; our history departments in 200+ Universities remain under-funded and totter on the verge of being declared “non merit” by administrators influenced by market economics. On the other hand we continue to boast of a 5000 year old civilization, but when confronted by foreigners or our own conscience, we find few books that tell our past in a way that can ignite popular imagination and at the same time give leads to future research by showing where the gaps are.
Now that I have vented my frustration as an outsider to the discipline of history, let me address myself to Savarkar’s book. It is one of the best written so far on the subject of the great uprising of 1857. It is truly panoramic and sweeps thousands of kilometers of territory, from Kunwar Singh’s Jagdishpur in Behar to Peer Ali’s Patna, to Nana Saheb, Azimullah Khan and Tatia Tope’s Bithoor and Kanpur, to Laxmibai’s Jhansi, to Begum Hazrat Mahal and Moulvie Ahmed Shah’s Awadh and Lucknow, to Bakht Khan’s Bareilly, to Bahadur Shah Zafar and Feroze Shah’s Dilli. The innumerable heroes mentioned by Savarkar who rose up and led the local uprisings in town after town and kingdoms after kingdom all across the Gangetic plain, central India and even south of the Vindhyas are too long to be listed here. The other--those who fought with great “heroism” and “loyalty” on the side of the British and were mainly responsible for the victory of the British in almost all the battles are also mentioned with great feeling of revulsion by the author. Those who waited to see which side might win and remained neutral and ultimately threw their weight behind the British are also listed at length.
A panoramic view of history is difficult to narrate. In Mahabharata, Vyas used the artifice of “embedded journalist”--Sanjaya and his tele-vision to tell the story of the great battle of Kurukshetra. Here Savarkar uses no such artifice and with remarkable dexterity handles distances, places, times and events that take place over a battlefield of continental proportions, compared to Europe, and spanning several years. If his exclamations over bravery and heroism of patriots and fury over treachery by Indians, sound repetitive and sentimental, one just glides past them because of the wealth of information that he provides about a period about which we have been taught or told so little.
The story itself is very inspiring because it has not been told in this intensely nationalistic fashion in the last 150 years. On the other hand there is increasing evidence that British consciously suppressed all objective historiography much less nationalistic historiography and engaged in calculated character assassination of all the main leaders of uprising, be it Bahadur Shah Zafar, or Nana Saheb, or Tatia Tope or Begum Hazrat Mahal and so on.
The book extensively quotes fragments of truth that slipped through British eyewitness accounts of the uprising. Kaye, Ball, Malleson and others are frequently quoted to buttress author’s argument. However Savarakar hardly gives any kind of references to what he asserts about the extensive nature of preparation of the uprising, the methods of their organization, their statecraft and their vision. He mentions Swaraj and Swadharma as the guiding vision of the uprising but is deliciously vague about what they meant to the rebels.
Thus a historian might call this legendary in another sense of the word—full of legends rather than facts. From circumstantial evidence and logic we could infer that he may be right about many things that he asserts but an academic historian would probably baulk at it. Obviously he worked under very difficult circumstances while researching for the book in London. However there is no excuse for professional historians not following his leads up.
Another aspect of the book is that it was agit-prop at its best. In fact the book was extensively distributed by Ghadar Party amidst different units of the Indian army in their attempt to organize another widespread mutiny in the army in 1915 to coincide with a civilian uprising, a repeat of 1857 so to say. In fact Ghadar Party expressly chose the word Ghadar in its title not only to adduce revolutionary attributes to the organization but also to convey that “the Great Ghadar of 1857 could not achieve its aims and hence the task of the revolutionaries now, would be to complete it”. When British agents penetrated this attempt, and the leaders were arrested in hundreds in different cantonments, many copies of Savarkar’s book were found with the soldiers involved.
All in all even 100 years after being written, this incandescent piece of writing brings the events of 1857 to life and makes it worth reading to all interested in history of colonialism and India’s fight against it.
(Ghadar Jari Hai is a quarterly magazine produced from New Delhi, India. For more information write to S Raghavan, Editor, jaarihai@yahoo.co.in)
Book Review
The legendary history of 1857
Shivanand Kanavi
Vinayak Damodar Savarkar’s book, “The Indian war of independence 1857” is a truly legendary book. In both senses of the word.
The book itself has achieved a legendary status in the last hundred years since its first publication. The book showed up the censors in England for what they were, when they took the unprecedented step of banning it before it was even published. Thus it was a remarkable enterprise, in which many patriots participated, to enable the book to see the light of the day. Lala Hardayal, professor at University of California at Berkeley and founder of the famous Hindusthani Ghadar Party reprinted it in 1912 to make it available to a larger audience and Bhagat Singh and his associates also found it worthwhile to publish it again in India later. It is a pity that no publisher has thought it fit to reprint it in this 150th anniversary year of the Great Ghadar, when old books are being reprinted and new ones being churned out. It is heartening that most booksellers are reporting a lot of interest in books on 1857 among the reading public.
It is intriguing that a nation that groaned under colonial yoke for 200 years and whose pre-colonial past is glorified by some and decried by others but researched and documented in only a fragmentary fashion. We continue to be indifferent to re-discovering ourself even after gaining political independence. Our schoolteachers rarely take students to museums or monuments and do not teach history in a living fashion; our history departments in 200+ Universities remain under-funded and totter on the verge of being declared “non merit” by administrators influenced by market economics. On the other hand we continue to boast of a 5000 year old civilization, but when confronted by foreigners or our own conscience, we find few books that tell our past in a way that can ignite popular imagination and at the same time give leads to future research by showing where the gaps are.
Now that I have vented my frustration as an outsider to the discipline of history, let me address myself to Savarkar’s book. It is one of the best written so far on the subject of the great uprising of 1857. It is truly panoramic and sweeps thousands of kilometers of territory, from Kunwar Singh’s Jagdishpur in Behar to Peer Ali’s Patna, to Nana Saheb, Azimullah Khan and Tatia Tope’s Bithoor and Kanpur, to Laxmibai’s Jhansi, to Begum Hazrat Mahal and Moulvie Ahmed Shah’s Awadh and Lucknow, to Bakht Khan’s Bareilly, to Bahadur Shah Zafar and Feroze Shah’s Dilli. The innumerable heroes mentioned by Savarkar who rose up and led the local uprisings in town after town and kingdoms after kingdom all across the Gangetic plain, central India and even south of the Vindhyas are too long to be listed here. The other--those who fought with great “heroism” and “loyalty” on the side of the British and were mainly responsible for the victory of the British in almost all the battles are also mentioned with great feeling of revulsion by the author. Those who waited to see which side might win and remained neutral and ultimately threw their weight behind the British are also listed at length.
A panoramic view of history is difficult to narrate. In Mahabharata, Vyas used the artifice of “embedded journalist”--Sanjaya and his tele-vision to tell the story of the great battle of Kurukshetra. Here Savarkar uses no such artifice and with remarkable dexterity handles distances, places, times and events that take place over a battlefield of continental proportions, compared to Europe, and spanning several years. If his exclamations over bravery and heroism of patriots and fury over treachery by Indians, sound repetitive and sentimental, one just glides past them because of the wealth of information that he provides about a period about which we have been taught or told so little.
The story itself is very inspiring because it has not been told in this intensely nationalistic fashion in the last 150 years. On the other hand there is increasing evidence that British consciously suppressed all objective historiography much less nationalistic historiography and engaged in calculated character assassination of all the main leaders of uprising, be it Bahadur Shah Zafar, or Nana Saheb, or Tatia Tope or Begum Hazrat Mahal and so on.
The book extensively quotes fragments of truth that slipped through British eyewitness accounts of the uprising. Kaye, Ball, Malleson and others are frequently quoted to buttress author’s argument. However Savarakar hardly gives any kind of references to what he asserts about the extensive nature of preparation of the uprising, the methods of their organization, their statecraft and their vision. He mentions Swaraj and Swadharma as the guiding vision of the uprising but is deliciously vague about what they meant to the rebels.
Thus a historian might call this legendary in another sense of the word—full of legends rather than facts. From circumstantial evidence and logic we could infer that he may be right about many things that he asserts but an academic historian would probably baulk at it. Obviously he worked under very difficult circumstances while researching for the book in London. However there is no excuse for professional historians not following his leads up.
Another aspect of the book is that it was agit-prop at its best. In fact the book was extensively distributed by Ghadar Party amidst different units of the Indian army in their attempt to organize another widespread mutiny in the army in 1915 to coincide with a civilian uprising, a repeat of 1857 so to say. In fact Ghadar Party expressly chose the word Ghadar in its title not only to adduce revolutionary attributes to the organization but also to convey that “the Great Ghadar of 1857 could not achieve its aims and hence the task of the revolutionaries now, would be to complete it”. When British agents penetrated this attempt, and the leaders were arrested in hundreds in different cantonments, many copies of Savarkar’s book were found with the soldiers involved.
All in all even 100 years after being written, this incandescent piece of writing brings the events of 1857 to life and makes it worth reading to all interested in history of colonialism and India’s fight against it.
(Ghadar Jari Hai is a quarterly magazine produced from New Delhi, India. For more information write to S Raghavan, Editor, jaarihai@yahoo.co.in)
Tuesday, February 12, 2008
Indian Science: Challenges
Business India, January 2001
Mofussil science
Science in India has echoed the developments in the West with hardly any conceptual or experimental breakthroughs. The current state of science education is alarming
Shivanand Kanavi
“In India, we let existing institutions die and meanwhile plan to build new ones," is the bitter comment made by M.M. Sharma, a Fellow of Royal Society (FRS). Sharma was referring to the plight of our universities, of which he has first-hand experience, having worked in UDCT (of the Bombay University) all his professional life. Today, we have 280 universities but cannot compare any of them to what BHU or Allahabad or Calcutta or Aligarh were in the 1940s and 1950s as centres of science. It will look preposterous to even consider comparing them to Harvard, MIT, Caltech, Stanford, Cornell, Berkeley or Cambridge, which are some of the main centres of frontline science in the world today.
While the number of universities have proliferated, they have become hotbeds of politics for state governments. "Universities have basically become examining bodies. Ninety nine per cent of the time is spent in organising examinations and results and convocation," adds Sharma. Today, even top universities have no research budget and wait for grants to come from CSIR or various government ministries like Department of Science & Technology, Department of Bio-Technology, etc. Libraries are languishing as they have no money to buy research journals and Internet infrastructure is primitive. The interest of students in basic sciences too is waning as more and more look for some kind of professional education and those that finally take to science are mostly reluctant ones.
Some of the best equipped institutions and laboratories in India are outside the university system and they take no part in science education except for some of them registering students for PhD. Industrial funding for science is not forthcoming. The days of Tatas establishing the Indian Institute of Science in Bangalore and the Tata Institute of Fundamental Research in Mumbai, two of our finest science institutions - seem to have vanished. Neither is industry taking up rejuvenation of a few of our universities. In this regard, the interest shown by IIT alumni in contributing to their rejuvenation is commendable though ironical; after all in India, the IITs are supposed to be the rich cousins of universities.
Today, we have very few FRS - just about 17 who are alive and working in India,, leave alone Nobel laureates. Only one of them is in his forties and the rest obviously did their work in 1960s and early 1970s. Clearly they were products of university education in the 1950s and 1960s. Are we going to see some more added to this list in the first decade of the 21st century? If there is no serious thinking and action on this front by academics, scientists, industry and government right now, all talk of India becoming a global knowledge player, etc, will prove to be undiluted bombast.
A few bright spots in this dark scenario are the government's Swarna Jayanthi Fellowships. Sixteen of them have been awarded to young bright scientists in their thirties. They will get packages equal to directors and secretaries of the government and handsome grants for books and equipment. Besides the Science Talent Search fellowships of NCERT given to school and college students, CSIR has just started a scheme for selecting the top 50 school children from each state and giving them various incentives like scholarships, visits to top laboratories and interaction with scientists, etc.
The fact that the scientific community realises the urgency of stemming the rot from whatever meagre resources it has - mainly constituting ideas - was apparent in the first Indian Science Congress of the new millennium held in Pune in the first week of January. Normally, a gerontocracy of Indian science, gives all the keynote lectures, Millennium lectures, evening lectures etc. and the delegates go sightseeing with their families. However, this science congress presided over by R.A. Mashelkar tried to be different. All lectures were given by 22 bright scientists in their forties. There were special sessions for children and students as well.
The result overwhelmed not only the scientists gathered in the Pune University campus but all civic and police authorities of Pune. Lakhs of school and college students poured in not only from Pune but from Jalgaon, Dhuliya, Akola, Malegaon, Sangli, etc - the mofussil towns of Maharashtra. It led to long traffic jams and even mild stampedes as the infrastructure at Pune University creaked to accommodate the nearly half a million visitors over four days of the congress. Children and their parents packed water bottles and picnic hampers and rushed to the venue in the early morning chill to stand in the queue.
So if Indian science has been characterised as imitating the western metropolises then today it appears that kids from mofussil India will save the day for science while the Indian city slickers dream of Silicon Valley and derivatives trading on Wall Street or Dalal Street.
Mofussil science
Science in India has echoed the developments in the West with hardly any conceptual or experimental breakthroughs. The current state of science education is alarming
Shivanand Kanavi
“In India, we let existing institutions die and meanwhile plan to build new ones," is the bitter comment made by M.M. Sharma, a Fellow of Royal Society (FRS). Sharma was referring to the plight of our universities, of which he has first-hand experience, having worked in UDCT (of the Bombay University) all his professional life. Today, we have 280 universities but cannot compare any of them to what BHU or Allahabad or Calcutta or Aligarh were in the 1940s and 1950s as centres of science. It will look preposterous to even consider comparing them to Harvard, MIT, Caltech, Stanford, Cornell, Berkeley or Cambridge, which are some of the main centres of frontline science in the world today.
While the number of universities have proliferated, they have become hotbeds of politics for state governments. "Universities have basically become examining bodies. Ninety nine per cent of the time is spent in organising examinations and results and convocation," adds Sharma. Today, even top universities have no research budget and wait for grants to come from CSIR or various government ministries like Department of Science & Technology, Department of Bio-Technology, etc. Libraries are languishing as they have no money to buy research journals and Internet infrastructure is primitive. The interest of students in basic sciences too is waning as more and more look for some kind of professional education and those that finally take to science are mostly reluctant ones.
Some of the best equipped institutions and laboratories in India are outside the university system and they take no part in science education except for some of them registering students for PhD. Industrial funding for science is not forthcoming. The days of Tatas establishing the Indian Institute of Science in Bangalore and the Tata Institute of Fundamental Research in Mumbai, two of our finest science institutions - seem to have vanished. Neither is industry taking up rejuvenation of a few of our universities. In this regard, the interest shown by IIT alumni in contributing to their rejuvenation is commendable though ironical; after all in India, the IITs are supposed to be the rich cousins of universities.
Today, we have very few FRS - just about 17 who are alive and working in India,, leave alone Nobel laureates. Only one of them is in his forties and the rest obviously did their work in 1960s and early 1970s. Clearly they were products of university education in the 1950s and 1960s. Are we going to see some more added to this list in the first decade of the 21st century? If there is no serious thinking and action on this front by academics, scientists, industry and government right now, all talk of India becoming a global knowledge player, etc, will prove to be undiluted bombast.
A few bright spots in this dark scenario are the government's Swarna Jayanthi Fellowships. Sixteen of them have been awarded to young bright scientists in their thirties. They will get packages equal to directors and secretaries of the government and handsome grants for books and equipment. Besides the Science Talent Search fellowships of NCERT given to school and college students, CSIR has just started a scheme for selecting the top 50 school children from each state and giving them various incentives like scholarships, visits to top laboratories and interaction with scientists, etc.
The fact that the scientific community realises the urgency of stemming the rot from whatever meagre resources it has - mainly constituting ideas - was apparent in the first Indian Science Congress of the new millennium held in Pune in the first week of January. Normally, a gerontocracy of Indian science, gives all the keynote lectures, Millennium lectures, evening lectures etc. and the delegates go sightseeing with their families. However, this science congress presided over by R.A. Mashelkar tried to be different. All lectures were given by 22 bright scientists in their forties. There were special sessions for children and students as well.
The result overwhelmed not only the scientists gathered in the Pune University campus but all civic and police authorities of Pune. Lakhs of school and college students poured in not only from Pune but from Jalgaon, Dhuliya, Akola, Malegaon, Sangli, etc - the mofussil towns of Maharashtra. It led to long traffic jams and even mild stampedes as the infrastructure at Pune University creaked to accommodate the nearly half a million visitors over four days of the congress. Children and their parents packed water bottles and picnic hampers and rushed to the venue in the early morning chill to stand in the queue.
So if Indian science has been characterised as imitating the western metropolises then today it appears that kids from mofussil India will save the day for science while the Indian city slickers dream of Silicon Valley and derivatives trading on Wall Street or Dalal Street.
Monday, January 7, 2008
Story of Nasscom
Business India, February 19-March 4, 2001
Power Lobbying
Shivanand Kanavi
Lobby: 1. Solicit the support of (an influential person) 2. Members of the public seek to influence members of the legislature 3. Frequent a parliamentary lobby 4. Get a Bill through the legislature by interviews, etc in the lobby.
(Concise Oxford Dictionary)
Though it sounds like a harmless part of any democracy in this sanitised version, lobbying is yet to attain a respectable position in India. In the United States, ex-presidential candidates, ex-senators and ex-ambassadors sport the description "lobbyist" with no hesitation. In India it brings on the image of a khadi-clad fixer, with paan in the mouth and toting a mobile phone, hanging around Delhi or various state capitals. Alternately, it could be a shadowy bagman representing corporate interests and servicing various MPs and ministers, seeking confidential Cabinet information or planting starred questions in Parliament on ill-starred corporate rivals.
Of course, come February and the Central Budget, 200-odd industry associations in the country seek an appointment with the finance minister - or at least a joint secretary in finance and other ministries - and present their wish list. Having done their job they vanish till the next February or the next consignment of Chinese goods.
In the first couple of years of liberalisation, the old trade associations, CII (Confederation of Indian Industry) and Ficci (Federation of Indian Chambers of Commerce and Industry) played a major role in pooling public opinion about deregulation and liberalisation and in showcasing India as a destination for foreign investors. Soon, the first flush was over and the economy started opening up for global competition. The protected laggards began feeling the pinch as never before, and the Bombay Club and its clones emerged. Large federations of industry associations beset by contradictory pulls from user industries and producer industries started singing a protectionist tune. The sheen gained as liberalisers and wannabe global players was lost in no time by many entrepreneurs and industry associations.
In this scenario, if there is one organisation that has lobbied for policy changes openly, transparently, and in a well-planned manner in India and abroad on a wide variety of subjects and achieved considerable success; it has been Nasscom.
Today, Nasscom members and its president Dewang Mehta have become a face of corporate India that is welcomed in any part of the globe and listened to with respect. How a bunch of computer nerds and a suave spokesman achieved this is the story Business India looked into.
Nasscom started its activities in December 1988 (see box Success has many fathers ... ) in a low key. The first major challenge it faced was effectively articulating the problems of software companies to the government. Though exporting most of their services, they were not getting the income tax benefits that other industries were getting. Adding to their woes, they were not getting bank credit. In 1991, Nasscom took the matter up for lobbying. "Banks saw no land, plants, and machinery in software companies; the entrepreneurs, moreover, were technocrats and had no great personal wealth of their own to use as collateral. Thus, income tax exemption was crucial. We were not asking for special treatment but to be treated on par with other industries," says Harish Mehta, then chairman of Nasscom. Industry leaders and Dewang Mehta, who had just joined as executive director, pleaded their case with Dr Manmohan Singh, who was very sceptical of the demand. "Vittal, then in the Department of Electronics, was very supportive and promised the finance ministry that the software industry would achieve exports of about 400 million by the year-end. The target was impossible to achieve, but we said we would do our best. Since the export did not involve tangibles, finance ministry officials were hesitant to give the benefit," adds Harish.
"I had to give up my software company Fractal Graphics in London and come back to India due to family obligations. I was told that running the secretariat of Nasscom was a light job and I could work two days a week there and do my own business during the rest of the time," recalls Dewang.
BOX
Success has many fathers ...
The cliche is proving to be particularly true, as Nasscom has gained great visibility recently. There are several people who claim to be founders, co-founders of Nasscom as if it were a new startup from the Valley.
In the beginning there was only the Computer Society of India, which was an organisation of academics and professionals, but did not address IT industry concerns. So, a new association - Manufacturers Association of Information Technology (MAIT) was formed in 1982. True to its name, it was an association of primarily hardware manufacturers. "In a council of 15-20, there were two representing dot matrix printers,” recalls F.C. Kohli. It reflected the infancy of software industry and the then existing mindset that said “buy a PC or a Mini and the software is almost free”.
Software exporters had specific problems, which were not being addressed. A software delegation, which had gone to the US for a road show, sat together after a tiring day in a Boston bar and brainstormed about a separate software association naturally, all those who were in that ‘Boston Scotch Party’ claim to be founders of Nasscom.
Then there are stories of a dinner at Vijay Mukhi’s house; scotch again at the Sea Lounge (Taj Palace, Mumbai), brainstorming in Bombay hosted by Harish Mehta, in Bangalore by Nandan Nilekani and in Delhi by Saurabh Srivastava and so on. Essentially, it all came from dissatisfaction with MAIT. Two founders of MAIT- Prem Shivdasani and Ashok Narasimhan- were also roped in. And a body called Nasscom was registered, with the following signatories to the MoU: Prem Shivdasani, Harish Mehta, Saurabh Srivastava, Yash Pal Sahni, Lalit Kanodia, K Pandyan and Ashank Desai.
The late Prem Shivdasani, the first chairman of Nasscom, is credited with coining the name Nasscom (National Association of Software and Service Companies). It was prophetic, since it included the non-existent IT Services, which became important later.
"Frankly, I was not happy about the formation of a new body,” says software pioneer F.C. Kohli. “The IT industry itself was nascent and I did not like fragmentation. I also firmly believed that hardware and software are two sides of the same coin. When the people who wanted to start Nasscom saw me, I blessed it, though I felt bad about it,” he says. “Initially, it was a small organization, but the real renaissance of Nasscom took place with Dewang Mehta. He was a charted accountant and also a software man. In those very early days he played with graphics software, which is a very complex software. He has worked very hard. In fact, he had no other life than Nasscom. But more than anything else, he connects with people,” sums up Kohli. And the rest is history.
--------------------------------
Dewang Mehta took to lobbying like a fish in water. He had seen his father lobby for pharmaceutical companies among the MPs in Delhi during his childhood. He managed to get endorsement from 40 MPs for the income tax waiver on software exports and waited for the budget proposals with bated breath.
"We were not allowed inside the Parliament during the Budget session. I still remember waiting outside Parliament house the whole day with Harish and buttonholing everybody who came out, trying to find out what was happening inside; a historic budget was being presented by Dr Manmohan Singh," recalls Dewang.
Singh gave a one-year waiver in the 1991 budget and the software industry was ecstatic. Suddenly, Nasscom gained popularity within the industry. "That was our first tangible victory and we had proven our point that a focused association like Nasscom was needed to lobby for the software industry, as against general ones that existed then," says Harish Mehta. "We worked so hard to achieve it that the promised two days a week evaporated in no time and I never looked back from my Nasscom commitment after that," says Dewang. This taste of victory was a turning point for Nasscom and for the Indian software industry.
Every industry association lobbies for protection or concessions with the government. But dealing with intangibles like software was new to bureaucrats and ministers. Come every February and each budget, and Nasscom had to lobby to get an extension on tax exemption. Finally, in 1997, P. Chidambaram, then finance minister, who was software savvy, gave the income tax benefit to software on par with the rest of the exporting industries till 2002, as allowed under WTO.
An anecdote from 1997 illustrates the problems involved in educating government officials. The government had proposed a 5 per cent duty on software imports, whereas Nasscom had asked for zero duty. This in itself amazed some people, who asked: "Are you not afraid of competition when all other sectors are asking for protection?" The reason was simply that imported software was being used to provide software services and, in any case, IT was a global industry and one had to use best of the breed products. "Chidambaram, then finance minister, asked irritably: 'You have billion dollars in exports, can't you pay 5 per cent duty?'. We explained that the import duty, even if imposed, could become impossible to implement since software can be downloaded through Internet gateways. An officer immediately piped in: 'But sir, we can make a customs officer sit at their gateway and charge the duty!' He had not understood the difference between a gate and a gateway. But Chidambaram immediately understood our point and relented," says Dewang.
The billion-dollar barrier was a significant one. Once the industry crossed it in exports in 1997, everybody took notice, both in India and abroad. While it is true that the growth in exports is primarily the achievement of software companies, Nasscom from the very beginning has been a great facilitator. For example, it has regularly organised conferences and seminars abroad to tell the India story. "The delegations to these seminars comprise any member company which applies by the deadline without any discrimination. The seminars end with actual deals being signed. We have conducted over a hundred of them in a short period of time. Even now, when the US ambassador says that over 266 of Fortune 1000 US companies are outsourcing mission critical software to India, we have to keep targeting the other 70 per cent who are not," says Dewang.
A major concern for the Indian software industry, of course, is its very heavy dependence on the US market. Over the last few years Nasscorn has taken initiatives in that respect and organised marketing seminars in Europe, Japan and Oceania. "Nasscom has done a wonderful job marketing and brand building for Indian software abroad. We have assisted them in Japan with the Indo-Japan business council for the last three years," says Amit Mitra, Director-General of Ficci.
The result is that today only 58 per cent of Indian software exports are to the US and the rest is primarily divided between Europe and Japan. "Nasscom, in fact, is running a programme called Ninjas (Nasscom India Japan Alliance in Software) which will help train hundreds of Indian software engineers in Japanese language and culture. The Japanese market has been the toughest to crack. The real breakthrough came with Y2K, when about 30 Japanese companies came with an SOS to Nasscom. We put them in touch with the entire Indian software industry and their problem was solved. That is how today there is tremendous interest in Indian software in Japan," says Dewang.
This also underlines how Nasscom operates and why it is so popular with its members. The association sends tonnes of research papers and information regarding market conditions; government policies; visa and regulatory issues in other countries; Indian government notifications and so on, to all its members. "I don't think any other association sends as much mail to its members. I get about 200 mails from them, giving me really useful information. The secretariat is doing a great job," says a member of Nasscom. "All these services cost money and we, of course, remove anyone who does not pay his membership immediately," says Arun Kumar, MD of Hughes Software and treasurer of Nasscom. Nasscom today has a budget of Rs10 crore collected largely from membership and conferences. The secretariat, however, is extremely slim, consisting of only 19 people. The frugal atmosphere, high pressure of deadlines, along with long working hours in the Nasscom office in Vishwa Yuvak Kendra in Delhi reminds one of a software start-up rather than an industry association.
BOX
Mr. Nasscom
The following narration by Dewang about his activities in the last week of January and first week of February on the eve of the Nasscom 2001 conference in Mumbai speaks for itself:
"Last Monday was the advisory committee meeting for the IT ministry. Later there was an industry leadership lecture organised by Nasscom, where John Chambers, CEO of Cisco Systems, spoke. It was followed by a dinner hosted by Pramod Mahajan in honour of John Chambers".
"Late in the night I flew to Paris. After a long time France is looking very positively towards India. It has taken eight years. We not only had a successful road show, but also signed a MoU with Syntec, which is Nasscom's counterpart in France. Wednesday evening I went to Aachen, Germany, and had a road show there. The next day I was in Berlin where we had not only a promotional seminar but in the afternoon actual contracts were signed. After coming back on Monday we had a meeting with the finance minister, Yashwant Sinha. Tuesday I had three major TV interviews."
"On Sunday I worked on the review, but in the afternoon I had flying classes. Flew till Mathura from Delhi and came back. Yesterday I had meetings with Canadian, French, and US ambassadors. For the first time we are having a session in the Nasscom conference with the ambassadors. Then I came to Mumbai in the evening, since I had to supervise the arrangements at Turf Club for a gala dinner during the conference, which will also have a fashion show. Then I went to the exhibition venue at the World Trade Centre. Then I had to meet a journalist. Checked into the hotel at 4 am and after an hour’s rest I just checked out at 5.30 am to leave for Bangalore by the early morning flight. I will be inaugurating Mindtree Consulting’s office there” .
To double check whether he was pulling a fast one on us, with all this namedropping, we spent a day with him. It turned out that his to-do-list actually increased as time went by. He had worked 48 hours straight but could not even catch forty winks on the first flight out of Mumbai to Bangalore, since he had fixed up an in-flight interview with us. On top of this, Sanjay Khan, bollywood actor and producer who was on the same flight, invited Dewang to join the board of a new media company he'd floated.
The man is a total workaholic. “Dewang works for Nasscom at great personal sacrifice. He is on the road for more than 15 days a month. That he is not married might have helped, but he is dedicated person. When Nasscom was not very big and did not have many resources for his travel, he was using his own frequent traveller coupons and I think Nasscom has been very fortunate in having him. It perhaps happens to a one in 100 organisations,” says none other than F.C. Kohli. Tall praise coming from a man of very few words and even fewer adjectives.
The visibility Dewang gets in the media is mainly due to his hardwork, but there are detractors in the industry who think that he gets more exposure than the elected chairmen even though “he is just an employee”.
Dewang seems quite sensitive to this criticism of hogging the limelight. In fact, he was hardly in the centrestage in the 20-odd sessions of the recently-conducted Nasscom 2001 and kept himself in the background. Of couse, cynics might say, “so what, he will have his 361 days.”
However, this manic is not all work and no play, he loves flying and is on his way to get a pilot licence. His passion is film-making and fashion design too. In fact, when he was hardly 20 and a young chartered accountant, he went to UK to receive a prize in the Commonwealth Film Festival for a documentary he had made called Garvi Gujarat. That is where he met Robert Kitching, a pioneer in computer graphics, who inspired him enough to get a BS in computer graphics from the Imperial College in London. Since his father got worried about his son’s inexplicable career path, he also finished his ICPA on the side, a UK accounting degree, Making a full length Bollywood masala film remains his ambition.
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"Besides lobbying in India, Nasscom has been very successful in lobbying abroad as well," says Amit Mitra. "We collaborated with them and did our bit about the H1B visa issue, as it unravelled in Washington, through the Joint Indo-US Business Council. But they worked really hard and in a focused way and achieved excellent results," adds he.
But the story of lobbying abroad does not start with visas. It goes way back. In 1993 Nasscom was the first industry association to appoint a fulltime lobbying firm in Washington.
The association has been most proactive in IPR. For example, in 1994, Nasscom started its anti-piracy initiative in India when IPR was becoming a major issue in Indo-US relations. Nasscom took up the campaign against software piracy and started conducting well-publicised raids. Today piracy has come down from 89 per cent to 59 per cent -largely due to awareness within the software industry and the corporate sector - though it continues with home computer users, small businesses, and some government departments. "We are way ahead of China in this respect and this is one of the reasons why US IT companies were attracted to investing in India," says Dewang. It was a master stroke, and gave immediate visibility to Nasscom in Washington. The Department of Commerce and the US trade representative, who was threatening actions under Super 301 against all and sundry for violating IPR, were pleasantly surprised to find an ally in India.
Again in 1995, the US trade representative (USTR) told a delegation of Nasscom that the copyright laws were not strict enough in India and they were contemplating using Super 301 over India. The Nasscom delegation immediately advised her to hold on and said they would lobby with the Indian government to change the copyright laws. "The USTR could not believe us. But we explained that if they imposed Super 301, it becomes politically impossible for the Indian government to change the laws, since it would appear to have buckled under pressure. Whereas, if the Indian IT industry lobbies for change, then the government will easily see reason," says Dewang. The strategy succeeded and gave a lot of leverage to Nasscom with USTR. It also helped bring more and more dedicated India development centres for US companies into India, as they felt more secure. Today, even data is being processed in India in back-office operations. If the relevant changes had not been made in copyright, most corporations, credit card companies, and banks would never have let go of data, which they, carefully guard.
Nasscom's most recent and remarkable achievement has been its role in the liberalisation of the telecom sector - the graveyard of many a telecom investor. Nasscom first targeted the Internet infrastructure and lobbied for allowing the emergence of private ISPs. When the government allowed private ISPs in 1998 - these were essentially bandwidth resellers for VSNL - Nasscom lobbied for allowing them to set up their own international gateways. This faced a lot of resistance since, as everybody knows in this age of convergence of data and voice, these gateways can willy-nilly be used as bridgeheads for breaking VSNL's monopoly over International voice services as well. Today the government has agreed in principle to bring forward the 2004 deadline for ending VSNL's monopoly status to 2002. It is also taking serious steps towards privatising VSNL. Such moves would have been unthinkable hardly a year ago. The campaign for bandwidth started way back in January during Nasscom 2000. The release of the Nasscom-McKinsey report on India's software future in December 1999 which postulated an achievable horizon of $50 billion of exports by 2008 set the ball rolling.
Once the figure of $50 billion sunk into the Indian psyche, Nasscom began popularising the necessity for removing bottlenecks in the quantity and quality of "bandwidth", a word known thus far to only hard core techies. Nasscom clearly pointed out that if the bottlenecks were not removed, the nation would lose $22.5 billion in IT-enabled services, e-commerce and software to other more lucrative international destinations. And along with it, about 6.5 lakh new jobs. Even politicians in UP can understand such numbers.
Clearly Nasscom's strategy of projecting the carrot and the stick has worked. In less than a year India is seeing the results of Operation Bandwidth. The domestic backbone of DoT, which had 34 Mbps capacity, is being upgraded to 2.5 Gbps by March 2001 and the international bandwidth, which was a meagre 300 Mbps and had a long waiting period, has jumped to 800 Mbps. VSNL and DoT have dropped charges on lease line and international circuits at times by 90 per cent. IT-enabled services are employing about 60,000 people and generating about $500 million in revenue. However, this is not the first time that Nasscom has used a report from an outsider effectively. It happened in 1992 as well, with the World Bank report on Indian software. In 1991 when IT had very low visibility, Nasscom found out through the Department of Electronics that the World Bank is working on a report on Indian software capabilities. "We managed to work with the WB team in producing the report and then used the same report to gain much required visibility," says Harish Mehta, CEO of Onward Novell and the then chairman of Nasscom.
Dewang's slogan 'Roti, Kapda, Makaan, Bijlee, and Bandwidth' is finally looking credible. It might not even be too surprising to soon find the IT industry and Nasscom lobbying for the much-needed power sector reforms. Already, IT minister Pramod Mahajan is saying in public that without assured power supply IT parks will be useless. Recently, power minister Suresh Prabhu was heard telling a friend: "I wish I get a Dewang for the power sector."
BOX
Peering
CII Ficci Nasscom
Members 3900 540 Chambers and 800
2,000 corporates
Budget 100 crore 18 crore 10 crore
Employees 450 350 19
"The access Nasscom enjoys in the government in all ministries from the PMO to telecom, industry, commerce and finance is amazing," says Amit Mitra. One achievement of Nasscom, and of Mehta in particular, is in converting the IT ministry into a valuable ally within the government, rather than an adversary. In fact, when the ministry was created, most people within the IT industry had said: "We have grown because we did not have any government interference. Now why create a ministry to spoil the sport?" Today Dewang and Pramod Mahajan have developed close ties, leading to easy access within the government for Nasscom. The friendship has drawn jealousy among some in the industry, more so when Mahajan has half jokingly begun introducing Dewang as the minister of state for IT. Perhaps it has fuelled Dewang's political ambitions as well. It certainly led Dewang to talk more of 'nation-building' and less of software. His Website says that he intends to contest the next Parliamentary elections. However, it is interesting to note that Pramod Mahajan had not even met Dewang Mehta till a year back. It is another proof of Dewang's people skills that software pioneer F.C. Kohli talks about. "Dewang is very hardworking, dedicated, has integrity, but most importantly he connects with people," says Kohli. "He has political ambitions but within Nasscom, he does not play politics."
Nasscom has taken up two serious projects as part of its mission. One is revitalising the Indian technical and engineering education to provide a high quantity of high-quality engineers to achieve export goals of $50 billion. This is a major initiative and creating a separate industry fund for this purpose is also being considered. The initiative will obviously be welcomed, as it will have far deeper significance than just munificence of some successful NRIs in regard to their alma maters. "There is serious discussion going on among us on how to raise the standards of the 43 regional engineering colleges to those of IITS," says Dewang. Narayana Murthy's speech in the Nasscom Industry Leadership series during the recently concluded Nasscom 2001 conference was in fact devoted to education.
The other initiative is directed towards making IT a part of common man's life, and introducing IT in governance and in education in a big way. This will mean for example; increasing use of IT in the RTOs for vehicle registration, land records, income tax, customs, municipal taxes, courts, and several other departments that interface with the public. This will obviously remove to a great extent the scourge of touts and agents and make the process more transparent and remotely operable from Internet kiosks without the necessity of visiting faraway government offices and queuing outside them. The use of Internet and video conferencing can bring a lecture by an IIT professor or a scientist to every school and college thereby bridging the divide and using scarce educational resources more intelligently.
However all these require time spent in championing them and demonstrating prototypes and so on, which Nasscom can effectively do. Besides modernising a large part of common man's life, it will also create a major market for software services within the country.
This is not to say that Nasscom does not have dissent among its leading lights. Without open and self-critical views, any such organisation is likely to go to seed. For example, past chairmen of Nasscom, Saurabh Srivastava (chairman of IIS infotech) and Harish Mehta (CEO of Onward Novell) are sounding cautionary notes. "Nasscom must save itself from becoming a victim of its own success. The accomplishments of the past have led to some sectors having unrealistic expectations from Nasscom, many of which are not in its purview at all. Nasscom cannot resolve systemic problems that plague the Indian economy as a whole. Nasscom would be doing a disservice to itself by diluting focus from its core agenda. We must learn and practice the art of saying 'No' when faced with such demands," says Harish Mehta.
However, Dewang is unfazed by dissent. "I have learnt much from Tarun Das (Director-General, CII) and Amit Mitra, who are handling complex issues and large organisations like CII and Ficci with contradictory pulls. Within Nasscom we have openness and I operate within the mandate given by my executive council. If I trespass it anytime I am, of course, open to criticism," says Dewang.
One major challenge facing the IT industry is the new phenomenon of startups, many of which are involved in products rather than services. Will Nasscom, dominated entirely by the service companies, be able to nurture them as well? "Our membership grew by 200, a hefty 33 per cent in one year. Obviously, most of them are startups. We have started incubation networking within Nasscom and will give them all assistance. In fact, in the projected $50-billion target we expect nearly 20-30 per cent to come from product exports. While large established companies will contribute to it, a lot is expected from the startups," replies Dewang.
When the going is good it is easy to do well but as competition from other countries builds up and as the US economy goes through a trough the task gets more challenging. Clearly Nasscom's work is cut out:
• Continued marketing of the "India story". Focusing on CIOs of the other 70 per cent of Fortune 1000 who are not outsourcing from India.
• Organising more focused marketing on specific skills in Indian companies in Internet enabling brick and mortar companies (e-biz), software skills in communications, optical networking, embedded software, and wireless technologies.
• Participating in new educational initiatives for upgrading quantity and quality of IT manpower in India.
• Dealing with the slowdown in the US economy and turn the adversity into an opportunity.
Dewang and Nasscom's immediate agenda is:
• Open 10 offices in India in 2001, Mumbai, Bangalore, Hyderabad, Chennai, Pune, Ahmedabad, Chandigarh, Lucknow, Kolkata and Jaipur.
• International offices in Geneva, London, Tokyo, Washington DC, San Jose, and Sophie Antapolis (France) during 2001 and 2002.
• NICE: A National Internet Center of Excellence, nucleated by Nasscom, to promote the Internet in local languages, for creating standards for content building and delivery, and researching new technologies.
• NISG: National Institute of Smart Governance to promote e-Governance (in association with the Government of India).
• Disaster Management Task Force:
Nasscom will help create the IT infrastructure for disaster-prone areas of India. This is a reaction to the earthquake disaster in Gujarat.
• Work with Civil Aviation ministry to convert airports in Hyderabad, Bangalore, Ahmedabad, and Pune into international airports so that global movement of IT professionals becomes less of a pain.
Personalities aside, growth and particularly fast growth, brings its own problems. A course correction is required from time to time, be it an organisation or an individual. Interpersonal problems can exist in any organisation, whether it's of the old economy or the New Economy or even a housing cooperative society. What's central is that a dynamic industry is created, which can bring great wealth and skills to India. This has charged up a sleeping nation, continuously wallowing in sectarianism and wasted opportunities. It has made the ideas to-riches story a reality rather than a Grimm's fairy tale. Its 50 per cent plus growth brings new problems of management within the components as well as within industry bodies like Nasscom. As long as it operates transparently, it can make mistakes and recover from them. It is, after all, a living organism and only dead organisms remain static, with no problems. The $50-billion pot of gold is the reward for Nasscom's continuing efforts.
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Power Lobbying
Shivanand Kanavi
Lobby: 1. Solicit the support of (an influential person) 2. Members of the public seek to influence members of the legislature 3. Frequent a parliamentary lobby 4. Get a Bill through the legislature by interviews, etc in the lobby.
(Concise Oxford Dictionary)
Though it sounds like a harmless part of any democracy in this sanitised version, lobbying is yet to attain a respectable position in India. In the United States, ex-presidential candidates, ex-senators and ex-ambassadors sport the description "lobbyist" with no hesitation. In India it brings on the image of a khadi-clad fixer, with paan in the mouth and toting a mobile phone, hanging around Delhi or various state capitals. Alternately, it could be a shadowy bagman representing corporate interests and servicing various MPs and ministers, seeking confidential Cabinet information or planting starred questions in Parliament on ill-starred corporate rivals.
Of course, come February and the Central Budget, 200-odd industry associations in the country seek an appointment with the finance minister - or at least a joint secretary in finance and other ministries - and present their wish list. Having done their job they vanish till the next February or the next consignment of Chinese goods.
In the first couple of years of liberalisation, the old trade associations, CII (Confederation of Indian Industry) and Ficci (Federation of Indian Chambers of Commerce and Industry) played a major role in pooling public opinion about deregulation and liberalisation and in showcasing India as a destination for foreign investors. Soon, the first flush was over and the economy started opening up for global competition. The protected laggards began feeling the pinch as never before, and the Bombay Club and its clones emerged. Large federations of industry associations beset by contradictory pulls from user industries and producer industries started singing a protectionist tune. The sheen gained as liberalisers and wannabe global players was lost in no time by many entrepreneurs and industry associations.
In this scenario, if there is one organisation that has lobbied for policy changes openly, transparently, and in a well-planned manner in India and abroad on a wide variety of subjects and achieved considerable success; it has been Nasscom.
Today, Nasscom members and its president Dewang Mehta have become a face of corporate India that is welcomed in any part of the globe and listened to with respect. How a bunch of computer nerds and a suave spokesman achieved this is the story Business India looked into.
Nasscom started its activities in December 1988 (see box Success has many fathers ... ) in a low key. The first major challenge it faced was effectively articulating the problems of software companies to the government. Though exporting most of their services, they were not getting the income tax benefits that other industries were getting. Adding to their woes, they were not getting bank credit. In 1991, Nasscom took the matter up for lobbying. "Banks saw no land, plants, and machinery in software companies; the entrepreneurs, moreover, were technocrats and had no great personal wealth of their own to use as collateral. Thus, income tax exemption was crucial. We were not asking for special treatment but to be treated on par with other industries," says Harish Mehta, then chairman of Nasscom. Industry leaders and Dewang Mehta, who had just joined as executive director, pleaded their case with Dr Manmohan Singh, who was very sceptical of the demand. "Vittal, then in the Department of Electronics, was very supportive and promised the finance ministry that the software industry would achieve exports of about 400 million by the year-end. The target was impossible to achieve, but we said we would do our best. Since the export did not involve tangibles, finance ministry officials were hesitant to give the benefit," adds Harish.
"I had to give up my software company Fractal Graphics in London and come back to India due to family obligations. I was told that running the secretariat of Nasscom was a light job and I could work two days a week there and do my own business during the rest of the time," recalls Dewang.
BOX
Success has many fathers ...
The cliche is proving to be particularly true, as Nasscom has gained great visibility recently. There are several people who claim to be founders, co-founders of Nasscom as if it were a new startup from the Valley.
In the beginning there was only the Computer Society of India, which was an organisation of academics and professionals, but did not address IT industry concerns. So, a new association - Manufacturers Association of Information Technology (MAIT) was formed in 1982. True to its name, it was an association of primarily hardware manufacturers. "In a council of 15-20, there were two representing dot matrix printers,” recalls F.C. Kohli. It reflected the infancy of software industry and the then existing mindset that said “buy a PC or a Mini and the software is almost free”.
Software exporters had specific problems, which were not being addressed. A software delegation, which had gone to the US for a road show, sat together after a tiring day in a Boston bar and brainstormed about a separate software association naturally, all those who were in that ‘Boston Scotch Party’ claim to be founders of Nasscom.
Then there are stories of a dinner at Vijay Mukhi’s house; scotch again at the Sea Lounge (Taj Palace, Mumbai), brainstorming in Bombay hosted by Harish Mehta, in Bangalore by Nandan Nilekani and in Delhi by Saurabh Srivastava and so on. Essentially, it all came from dissatisfaction with MAIT. Two founders of MAIT- Prem Shivdasani and Ashok Narasimhan- were also roped in. And a body called Nasscom was registered, with the following signatories to the MoU: Prem Shivdasani, Harish Mehta, Saurabh Srivastava, Yash Pal Sahni, Lalit Kanodia, K Pandyan and Ashank Desai.
The late Prem Shivdasani, the first chairman of Nasscom, is credited with coining the name Nasscom (National Association of Software and Service Companies). It was prophetic, since it included the non-existent IT Services, which became important later.
"Frankly, I was not happy about the formation of a new body,” says software pioneer F.C. Kohli. “The IT industry itself was nascent and I did not like fragmentation. I also firmly believed that hardware and software are two sides of the same coin. When the people who wanted to start Nasscom saw me, I blessed it, though I felt bad about it,” he says. “Initially, it was a small organization, but the real renaissance of Nasscom took place with Dewang Mehta. He was a charted accountant and also a software man. In those very early days he played with graphics software, which is a very complex software. He has worked very hard. In fact, he had no other life than Nasscom. But more than anything else, he connects with people,” sums up Kohli. And the rest is history.
--------------------------------
Dewang Mehta took to lobbying like a fish in water. He had seen his father lobby for pharmaceutical companies among the MPs in Delhi during his childhood. He managed to get endorsement from 40 MPs for the income tax waiver on software exports and waited for the budget proposals with bated breath.
"We were not allowed inside the Parliament during the Budget session. I still remember waiting outside Parliament house the whole day with Harish and buttonholing everybody who came out, trying to find out what was happening inside; a historic budget was being presented by Dr Manmohan Singh," recalls Dewang.
Singh gave a one-year waiver in the 1991 budget and the software industry was ecstatic. Suddenly, Nasscom gained popularity within the industry. "That was our first tangible victory and we had proven our point that a focused association like Nasscom was needed to lobby for the software industry, as against general ones that existed then," says Harish Mehta. "We worked so hard to achieve it that the promised two days a week evaporated in no time and I never looked back from my Nasscom commitment after that," says Dewang. This taste of victory was a turning point for Nasscom and for the Indian software industry.
Every industry association lobbies for protection or concessions with the government. But dealing with intangibles like software was new to bureaucrats and ministers. Come every February and each budget, and Nasscom had to lobby to get an extension on tax exemption. Finally, in 1997, P. Chidambaram, then finance minister, who was software savvy, gave the income tax benefit to software on par with the rest of the exporting industries till 2002, as allowed under WTO.
An anecdote from 1997 illustrates the problems involved in educating government officials. The government had proposed a 5 per cent duty on software imports, whereas Nasscom had asked for zero duty. This in itself amazed some people, who asked: "Are you not afraid of competition when all other sectors are asking for protection?" The reason was simply that imported software was being used to provide software services and, in any case, IT was a global industry and one had to use best of the breed products. "Chidambaram, then finance minister, asked irritably: 'You have billion dollars in exports, can't you pay 5 per cent duty?'. We explained that the import duty, even if imposed, could become impossible to implement since software can be downloaded through Internet gateways. An officer immediately piped in: 'But sir, we can make a customs officer sit at their gateway and charge the duty!' He had not understood the difference between a gate and a gateway. But Chidambaram immediately understood our point and relented," says Dewang.
The billion-dollar barrier was a significant one. Once the industry crossed it in exports in 1997, everybody took notice, both in India and abroad. While it is true that the growth in exports is primarily the achievement of software companies, Nasscom from the very beginning has been a great facilitator. For example, it has regularly organised conferences and seminars abroad to tell the India story. "The delegations to these seminars comprise any member company which applies by the deadline without any discrimination. The seminars end with actual deals being signed. We have conducted over a hundred of them in a short period of time. Even now, when the US ambassador says that over 266 of Fortune 1000 US companies are outsourcing mission critical software to India, we have to keep targeting the other 70 per cent who are not," says Dewang.
A major concern for the Indian software industry, of course, is its very heavy dependence on the US market. Over the last few years Nasscorn has taken initiatives in that respect and organised marketing seminars in Europe, Japan and Oceania. "Nasscom has done a wonderful job marketing and brand building for Indian software abroad. We have assisted them in Japan with the Indo-Japan business council for the last three years," says Amit Mitra, Director-General of Ficci.
The result is that today only 58 per cent of Indian software exports are to the US and the rest is primarily divided between Europe and Japan. "Nasscom, in fact, is running a programme called Ninjas (Nasscom India Japan Alliance in Software) which will help train hundreds of Indian software engineers in Japanese language and culture. The Japanese market has been the toughest to crack. The real breakthrough came with Y2K, when about 30 Japanese companies came with an SOS to Nasscom. We put them in touch with the entire Indian software industry and their problem was solved. That is how today there is tremendous interest in Indian software in Japan," says Dewang.
This also underlines how Nasscom operates and why it is so popular with its members. The association sends tonnes of research papers and information regarding market conditions; government policies; visa and regulatory issues in other countries; Indian government notifications and so on, to all its members. "I don't think any other association sends as much mail to its members. I get about 200 mails from them, giving me really useful information. The secretariat is doing a great job," says a member of Nasscom. "All these services cost money and we, of course, remove anyone who does not pay his membership immediately," says Arun Kumar, MD of Hughes Software and treasurer of Nasscom. Nasscom today has a budget of Rs10 crore collected largely from membership and conferences. The secretariat, however, is extremely slim, consisting of only 19 people. The frugal atmosphere, high pressure of deadlines, along with long working hours in the Nasscom office in Vishwa Yuvak Kendra in Delhi reminds one of a software start-up rather than an industry association.
BOX
Mr. Nasscom
The following narration by Dewang about his activities in the last week of January and first week of February on the eve of the Nasscom 2001 conference in Mumbai speaks for itself:
"Last Monday was the advisory committee meeting for the IT ministry. Later there was an industry leadership lecture organised by Nasscom, where John Chambers, CEO of Cisco Systems, spoke. It was followed by a dinner hosted by Pramod Mahajan in honour of John Chambers".
"Late in the night I flew to Paris. After a long time France is looking very positively towards India. It has taken eight years. We not only had a successful road show, but also signed a MoU with Syntec, which is Nasscom's counterpart in France. Wednesday evening I went to Aachen, Germany, and had a road show there. The next day I was in Berlin where we had not only a promotional seminar but in the afternoon actual contracts were signed. After coming back on Monday we had a meeting with the finance minister, Yashwant Sinha. Tuesday I had three major TV interviews."
"On Sunday I worked on the review, but in the afternoon I had flying classes. Flew till Mathura from Delhi and came back. Yesterday I had meetings with Canadian, French, and US ambassadors. For the first time we are having a session in the Nasscom conference with the ambassadors. Then I came to Mumbai in the evening, since I had to supervise the arrangements at Turf Club for a gala dinner during the conference, which will also have a fashion show. Then I went to the exhibition venue at the World Trade Centre. Then I had to meet a journalist. Checked into the hotel at 4 am and after an hour’s rest I just checked out at 5.30 am to leave for Bangalore by the early morning flight. I will be inaugurating Mindtree Consulting’s office there” .
To double check whether he was pulling a fast one on us, with all this namedropping, we spent a day with him. It turned out that his to-do-list actually increased as time went by. He had worked 48 hours straight but could not even catch forty winks on the first flight out of Mumbai to Bangalore, since he had fixed up an in-flight interview with us. On top of this, Sanjay Khan, bollywood actor and producer who was on the same flight, invited Dewang to join the board of a new media company he'd floated.
The man is a total workaholic. “Dewang works for Nasscom at great personal sacrifice. He is on the road for more than 15 days a month. That he is not married might have helped, but he is dedicated person. When Nasscom was not very big and did not have many resources for his travel, he was using his own frequent traveller coupons and I think Nasscom has been very fortunate in having him. It perhaps happens to a one in 100 organisations,” says none other than F.C. Kohli. Tall praise coming from a man of very few words and even fewer adjectives.
The visibility Dewang gets in the media is mainly due to his hardwork, but there are detractors in the industry who think that he gets more exposure than the elected chairmen even though “he is just an employee”.
Dewang seems quite sensitive to this criticism of hogging the limelight. In fact, he was hardly in the centrestage in the 20-odd sessions of the recently-conducted Nasscom 2001 and kept himself in the background. Of couse, cynics might say, “so what, he will have his 361 days.”
However, this manic is not all work and no play, he loves flying and is on his way to get a pilot licence. His passion is film-making and fashion design too. In fact, when he was hardly 20 and a young chartered accountant, he went to UK to receive a prize in the Commonwealth Film Festival for a documentary he had made called Garvi Gujarat. That is where he met Robert Kitching, a pioneer in computer graphics, who inspired him enough to get a BS in computer graphics from the Imperial College in London. Since his father got worried about his son’s inexplicable career path, he also finished his ICPA on the side, a UK accounting degree, Making a full length Bollywood masala film remains his ambition.
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"Besides lobbying in India, Nasscom has been very successful in lobbying abroad as well," says Amit Mitra. "We collaborated with them and did our bit about the H1B visa issue, as it unravelled in Washington, through the Joint Indo-US Business Council. But they worked really hard and in a focused way and achieved excellent results," adds he.
But the story of lobbying abroad does not start with visas. It goes way back. In 1993 Nasscom was the first industry association to appoint a fulltime lobbying firm in Washington.
The association has been most proactive in IPR. For example, in 1994, Nasscom started its anti-piracy initiative in India when IPR was becoming a major issue in Indo-US relations. Nasscom took up the campaign against software piracy and started conducting well-publicised raids. Today piracy has come down from 89 per cent to 59 per cent -largely due to awareness within the software industry and the corporate sector - though it continues with home computer users, small businesses, and some government departments. "We are way ahead of China in this respect and this is one of the reasons why US IT companies were attracted to investing in India," says Dewang. It was a master stroke, and gave immediate visibility to Nasscom in Washington. The Department of Commerce and the US trade representative, who was threatening actions under Super 301 against all and sundry for violating IPR, were pleasantly surprised to find an ally in India.
Again in 1995, the US trade representative (USTR) told a delegation of Nasscom that the copyright laws were not strict enough in India and they were contemplating using Super 301 over India. The Nasscom delegation immediately advised her to hold on and said they would lobby with the Indian government to change the copyright laws. "The USTR could not believe us. But we explained that if they imposed Super 301, it becomes politically impossible for the Indian government to change the laws, since it would appear to have buckled under pressure. Whereas, if the Indian IT industry lobbies for change, then the government will easily see reason," says Dewang. The strategy succeeded and gave a lot of leverage to Nasscom with USTR. It also helped bring more and more dedicated India development centres for US companies into India, as they felt more secure. Today, even data is being processed in India in back-office operations. If the relevant changes had not been made in copyright, most corporations, credit card companies, and banks would never have let go of data, which they, carefully guard.
Nasscom's most recent and remarkable achievement has been its role in the liberalisation of the telecom sector - the graveyard of many a telecom investor. Nasscom first targeted the Internet infrastructure and lobbied for allowing the emergence of private ISPs. When the government allowed private ISPs in 1998 - these were essentially bandwidth resellers for VSNL - Nasscom lobbied for allowing them to set up their own international gateways. This faced a lot of resistance since, as everybody knows in this age of convergence of data and voice, these gateways can willy-nilly be used as bridgeheads for breaking VSNL's monopoly over International voice services as well. Today the government has agreed in principle to bring forward the 2004 deadline for ending VSNL's monopoly status to 2002. It is also taking serious steps towards privatising VSNL. Such moves would have been unthinkable hardly a year ago. The campaign for bandwidth started way back in January during Nasscom 2000. The release of the Nasscom-McKinsey report on India's software future in December 1999 which postulated an achievable horizon of $50 billion of exports by 2008 set the ball rolling.
Once the figure of $50 billion sunk into the Indian psyche, Nasscom began popularising the necessity for removing bottlenecks in the quantity and quality of "bandwidth", a word known thus far to only hard core techies. Nasscom clearly pointed out that if the bottlenecks were not removed, the nation would lose $22.5 billion in IT-enabled services, e-commerce and software to other more lucrative international destinations. And along with it, about 6.5 lakh new jobs. Even politicians in UP can understand such numbers.
Clearly Nasscom's strategy of projecting the carrot and the stick has worked. In less than a year India is seeing the results of Operation Bandwidth. The domestic backbone of DoT, which had 34 Mbps capacity, is being upgraded to 2.5 Gbps by March 2001 and the international bandwidth, which was a meagre 300 Mbps and had a long waiting period, has jumped to 800 Mbps. VSNL and DoT have dropped charges on lease line and international circuits at times by 90 per cent. IT-enabled services are employing about 60,000 people and generating about $500 million in revenue. However, this is not the first time that Nasscom has used a report from an outsider effectively. It happened in 1992 as well, with the World Bank report on Indian software. In 1991 when IT had very low visibility, Nasscom found out through the Department of Electronics that the World Bank is working on a report on Indian software capabilities. "We managed to work with the WB team in producing the report and then used the same report to gain much required visibility," says Harish Mehta, CEO of Onward Novell and the then chairman of Nasscom.
Dewang's slogan 'Roti, Kapda, Makaan, Bijlee, and Bandwidth' is finally looking credible. It might not even be too surprising to soon find the IT industry and Nasscom lobbying for the much-needed power sector reforms. Already, IT minister Pramod Mahajan is saying in public that without assured power supply IT parks will be useless. Recently, power minister Suresh Prabhu was heard telling a friend: "I wish I get a Dewang for the power sector."
BOX
Peering
CII Ficci Nasscom
Members 3900 540 Chambers and 800
2,000 corporates
Budget 100 crore 18 crore 10 crore
Employees 450 350 19
"The access Nasscom enjoys in the government in all ministries from the PMO to telecom, industry, commerce and finance is amazing," says Amit Mitra. One achievement of Nasscom, and of Mehta in particular, is in converting the IT ministry into a valuable ally within the government, rather than an adversary. In fact, when the ministry was created, most people within the IT industry had said: "We have grown because we did not have any government interference. Now why create a ministry to spoil the sport?" Today Dewang and Pramod Mahajan have developed close ties, leading to easy access within the government for Nasscom. The friendship has drawn jealousy among some in the industry, more so when Mahajan has half jokingly begun introducing Dewang as the minister of state for IT. Perhaps it has fuelled Dewang's political ambitions as well. It certainly led Dewang to talk more of 'nation-building' and less of software. His Website says that he intends to contest the next Parliamentary elections. However, it is interesting to note that Pramod Mahajan had not even met Dewang Mehta till a year back. It is another proof of Dewang's people skills that software pioneer F.C. Kohli talks about. "Dewang is very hardworking, dedicated, has integrity, but most importantly he connects with people," says Kohli. "He has political ambitions but within Nasscom, he does not play politics."
Nasscom has taken up two serious projects as part of its mission. One is revitalising the Indian technical and engineering education to provide a high quantity of high-quality engineers to achieve export goals of $50 billion. This is a major initiative and creating a separate industry fund for this purpose is also being considered. The initiative will obviously be welcomed, as it will have far deeper significance than just munificence of some successful NRIs in regard to their alma maters. "There is serious discussion going on among us on how to raise the standards of the 43 regional engineering colleges to those of IITS," says Dewang. Narayana Murthy's speech in the Nasscom Industry Leadership series during the recently concluded Nasscom 2001 conference was in fact devoted to education.
The other initiative is directed towards making IT a part of common man's life, and introducing IT in governance and in education in a big way. This will mean for example; increasing use of IT in the RTOs for vehicle registration, land records, income tax, customs, municipal taxes, courts, and several other departments that interface with the public. This will obviously remove to a great extent the scourge of touts and agents and make the process more transparent and remotely operable from Internet kiosks without the necessity of visiting faraway government offices and queuing outside them. The use of Internet and video conferencing can bring a lecture by an IIT professor or a scientist to every school and college thereby bridging the divide and using scarce educational resources more intelligently.
However all these require time spent in championing them and demonstrating prototypes and so on, which Nasscom can effectively do. Besides modernising a large part of common man's life, it will also create a major market for software services within the country.
This is not to say that Nasscom does not have dissent among its leading lights. Without open and self-critical views, any such organisation is likely to go to seed. For example, past chairmen of Nasscom, Saurabh Srivastava (chairman of IIS infotech) and Harish Mehta (CEO of Onward Novell) are sounding cautionary notes. "Nasscom must save itself from becoming a victim of its own success. The accomplishments of the past have led to some sectors having unrealistic expectations from Nasscom, many of which are not in its purview at all. Nasscom cannot resolve systemic problems that plague the Indian economy as a whole. Nasscom would be doing a disservice to itself by diluting focus from its core agenda. We must learn and practice the art of saying 'No' when faced with such demands," says Harish Mehta.
However, Dewang is unfazed by dissent. "I have learnt much from Tarun Das (Director-General, CII) and Amit Mitra, who are handling complex issues and large organisations like CII and Ficci with contradictory pulls. Within Nasscom we have openness and I operate within the mandate given by my executive council. If I trespass it anytime I am, of course, open to criticism," says Dewang.
One major challenge facing the IT industry is the new phenomenon of startups, many of which are involved in products rather than services. Will Nasscom, dominated entirely by the service companies, be able to nurture them as well? "Our membership grew by 200, a hefty 33 per cent in one year. Obviously, most of them are startups. We have started incubation networking within Nasscom and will give them all assistance. In fact, in the projected $50-billion target we expect nearly 20-30 per cent to come from product exports. While large established companies will contribute to it, a lot is expected from the startups," replies Dewang.
When the going is good it is easy to do well but as competition from other countries builds up and as the US economy goes through a trough the task gets more challenging. Clearly Nasscom's work is cut out:
• Continued marketing of the "India story". Focusing on CIOs of the other 70 per cent of Fortune 1000 who are not outsourcing from India.
• Organising more focused marketing on specific skills in Indian companies in Internet enabling brick and mortar companies (e-biz), software skills in communications, optical networking, embedded software, and wireless technologies.
• Participating in new educational initiatives for upgrading quantity and quality of IT manpower in India.
• Dealing with the slowdown in the US economy and turn the adversity into an opportunity.
Dewang and Nasscom's immediate agenda is:
• Open 10 offices in India in 2001, Mumbai, Bangalore, Hyderabad, Chennai, Pune, Ahmedabad, Chandigarh, Lucknow, Kolkata and Jaipur.
• International offices in Geneva, London, Tokyo, Washington DC, San Jose, and Sophie Antapolis (France) during 2001 and 2002.
• NICE: A National Internet Center of Excellence, nucleated by Nasscom, to promote the Internet in local languages, for creating standards for content building and delivery, and researching new technologies.
• NISG: National Institute of Smart Governance to promote e-Governance (in association with the Government of India).
• Disaster Management Task Force:
Nasscom will help create the IT infrastructure for disaster-prone areas of India. This is a reaction to the earthquake disaster in Gujarat.
• Work with Civil Aviation ministry to convert airports in Hyderabad, Bangalore, Ahmedabad, and Pune into international airports so that global movement of IT professionals becomes less of a pain.
Personalities aside, growth and particularly fast growth, brings its own problems. A course correction is required from time to time, be it an organisation or an individual. Interpersonal problems can exist in any organisation, whether it's of the old economy or the New Economy or even a housing cooperative society. What's central is that a dynamic industry is created, which can bring great wealth and skills to India. This has charged up a sleeping nation, continuously wallowing in sectarianism and wasted opportunities. It has made the ideas to-riches story a reality rather than a Grimm's fairy tale. Its 50 per cent plus growth brings new problems of management within the components as well as within industry bodies like Nasscom. As long as it operates transparently, it can make mistakes and recover from them. It is, after all, a living organism and only dead organisms remain static, with no problems. The $50-billion pot of gold is the reward for Nasscom's continuing efforts.
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India's Technology Leaders
Business India, July 4-17, 1994
Leaders in Technology
By and large the Indian corporate sector showed little ability to cope with technology development during the Licence Raj. However, less than a dozen companies have achieved technological excellence that is being globally recognized. The investment in technology development by these ‘techies’ is now paying off.
Shivanand Kanavi
Corporate success worldwide has long been fuelled by technology. But since the 1970s, it has become even more crucial as several technology –strong newcomers hit pay dirt and became mega players in the global marketplace. These companies, called ‘techies’ by Wall Street analysts, are being regularly tracked.
However, the important questions for us are: Does India have its own ‘techies’? If yes, who are they? What has lent them the drive to succeed and who are the people who head them?
Some people feel that these questions are irrelevant at present. They argue that the overwhelming atmosphere for four decades after independence has been that of licensed production in a protected market. Indian businessmen have shown an inability to cope with technology development and have largely used their R&D divisions for tax benefits. So, under the circumstances, how can a technology-driven company emerge, they ask.
Does that mean we have to wait another couple of decades to see technological excellence in some Indian companies? Well, yes and no. Though we don't have a Bill Gates or a Seymour Cray in India as yet, there area a handful of examples of technological excellence in the middle level who are being globally recognised.
This handful of Indian techies that we short listed are clear winners within restricted parameters. They shown farsightedness in either developing their own manufacturing technologies (as in the case of agrochemical and bulk drug companies) or in buying it, mastering it and developing it further, thereby acquiring the know-why (as in engineering). As a result, now when the Indian economy is being thrown open to competition, these companies are more ready than others to take on new challenges.
A feature common to all these leaders in technology was that they are led by men who are themselves technologists or those with tech vision- like Dr. Gharda, Dr Parvinder Singh, Dr. Hamied, Dr. Anji Reddy, Desh Bandhu Gupta, Ravindra Reddy, etc. Surprisingly, the large companies in the corporate sector- Reliance, ITC, ACC, Grasim and Hindustan Lever- have done hardly any technology development compared to their resources and scale of operations. One of the many reasons they do not feature on the shortlist. Their success, according to Business India, is largely due to good financial management, economies of scale, marketing, and technology scouting for initial buying.
The only exceptions to this large-company rule are Telco, BHEL and L&T. Even here, though they are no doubt technology –driven companies, one has to tread with caution. For, most of them are multi-product and multi-plant companies, where technology leadership, it does exist, is uneven; and the impact of a particular innovation on the overall company or industry becomes difficult to evaluate. Thus, L&T may be doing brilliant work in terms of heavy fabrication for the nuclear and space programmes, or petrochemicals but the other sections, like cement, are far from technologically superior. By and large, however, the need to be proactive, ready to experiment and take risks, which are essential for technology leadership, are sorely lacking in the large companies.
Surprisingly the techies do not consist of idiosyncratic geniuses but rather dynamic engineers, technologists and R&D personnel who exhibit good market savvy and are incredibly self-assured. Most of the personnel in these companies enjoy the challenges of the job, love the atmosphere of relative autonomy, the elbowroom to experiment and the opportunity to learn from mistakes. And, finally, they live to see their ideas or innovations actually move from lab into production and get a charge out of competing with like-minded individuals in the marketplace. Obviously, in the world of the technology-driven, the intellectual challenge is everything.
So, which are these centres of technological excellence among our midst? What makes them tick? This is what Business India found out..
Agrochemicals
This is a sector that has seen a number of Indian companies coming out with innovative processes and successfully competing with multinationals, both in the domestic and international markets. Gharda Chemicals, Excel Industries, United Phosphorus, Lupin, have all done very well by becoming major players in technical grade agrochemicals, that is, pure agrochemical concentrate that is later diluted using various solvents and sold in the retail market. But even among this pack, one company stands out as a real techy: Gharda Chemicals:
Gharda Chemicals
Perhaps, the incident that , best sums up Dr Keki Gharda, the leader of Gharda Chemicals, is illustrated by a story that has become part of Indian chemical industry folklore. In the early 1980s, Dr Gharda was invited to an MRTP commission hearing which revolved around a multinational's application for a licence to produce isoproturon. Some Indian companies objected to the application for fear that they would not be able to compete. But Dr Gharda, alone, was of the opinion that there was nothing superior about the multinational's technology. To prove his point, he declared that his company would introduce a new, more efficient process within 18 months and compete with the multinational.
Most of the people who comprised the stunned audience that day would not have imagined that Gharda would be able to pull it off. But he did. True to his words, Gharda realised the danger of using the highly toxic isocyanate route in making pesticides, and came out with a process to produce isoproturon, using urea. Today, he is the second largest producer of isoproturon in the world with large exports to Europe, US and the Far East. The superiority of Gharda's process, which is today internationally known as the ‘Indian process', made even Rhone Poulenc, the European giant which had a monopoly in isoproturon earlier, sweat.
Since then, Gharda Chemicals has become the leading Indian company in technical grade agrochemicals. Cypermethrin - a popular insecticide; cypermethric acid chloride - an intermediate for cypermethrin; anilophos - a herbicide used, for rice, originally discovered by Hoechst though it now uses Gharda's process; chlorpyrifos- a new generation insecticide; and napropamide -- another herbicide, have all made Gharda a power to reckon with in the global agrochemical scene. In the last three years, a number of international agrochemical magazines have written about Gharda and even put him on their cover.
Gharda Chemcals started as a three –men-in- a-garage operation in the late 1960s, in Santacruz, a suburb of Bombay. Dr. Keki Gharda who had returned from the US after PhD in Chemical Engineering from the University of Michigan, Ann Arbor, joined the faculty of University Department of Chemical Technology (UDCT), Bombay. However, he could not get a permanent teaching position and he turned instead to industry.
His first success, in the field o dyestuffs, came fast. He synthesized pthalogen blue, a dye that was very popular in the textile industry but had to be imported from Germany. Later azo-dyes provided the bread and butter. However, with the tremendous proliferation of process technology in the small-scale sector, dyestuff manufacturing was no longer as attractive, so Gharda changed course midstream into agro-chemicals.
This time it was not as easy. The early 1980s, the years of transition, were difficult. As a plant engineer in Gharda’s Lote factory remarked, “In those days we were literally living hand to mouth. But unlike other industrialists, Dr. Gharda did not retrench any of the R&D staff. The later years vindicated his visionary faith in in-house R&D”.
That vision has helped him to move with the times. When quality and purity export markets of Europe, Gharda changed tack too. Today, his analytical lab is not only top class but has made a number of original contributions: half a dozen of them (in Fourier Transform Infra Red spectroscopy and in High Pressure Liquid Chromatography) have become part of international standards.
Today, Gharda is going through another round of diversification into bulk: drugs and engineering plastics. But why get into bulk drugs when there are so many players already? "While the Indian' bulk drug industry is strong in organic synthesis, they are not so strong in chemical engineering," answers Gharda. “With our strength in both, we will be ore efficient.” Typically, they are building plants for products that are yet to come out of their R&D.
But this confidence has got him his fair share of detractors. “He is and eccentric,” says an indignant major player in bulk drug manufacture. “He wants to spoil the bulk drug market by driving down the prices.” His anger is partly fuelled by the not-so-polite letter he received from Dr. Gharda, which categorically stated that since Gharda Chemicals is going to enter the bulk drugs market in fluroquinolones at a lower price, the existing competitors might as well quit!
Therein lies the essence of the man. Variously described in the industry as a missionary, a Gandhian, an eccentric, and a spoilsport, he has nevertheless always approached the market in his own unique manner. His strategy is to come out with new products at prices that are at least 20-30 per cent lower than the prevailing ones and hold them at that level for years. Aside from driving the competition out of the market, it even makes giant multinationals wary of him. Perhaps one of the reasons why, today, some of them are queuing up to tie up with him.
And he lives by his own rules. For examples, though he has received many awards for novel processes, he has not patented any. He believes that the superiority of technology should be decided in the marketplace rather than in court rooms. He also shies away from breaking up the manufacturing process into a number of stages and carrying these out in different plants to guard hi trade secrets, as most of his competitors do. “This will lead to the right hand not knowing what the left is doing. And you would lose the team spirit where you troubleshoot together and learn from each other” he says. “The name of the game is to come up with newer and better processes and products through R&D and always stay a step ahead of the competition.”
Which he has done. Gharda’s turnover in 1993-94 is Rs 170 crore; exports: Rs30 crore, but with the smooth functioning of the new cypermethric acid chloride and alphamethrin plants at Lote, the 1994-95 results are expected to show at least a 30 per cent growth. Already the profit before depreciation and tax is a hefty Rs45 crore, i.e. 26.5 per cent. Despite the fact that Gharda is not into formulation and retail marketing in a big way, we believe that it will become a diversified Rs 1000-crore-plus company by 2000AD
Pharmaceuticals
Off all the sectors that have seen growth, the pharmaceuticals sector is probably the most dramatic. In 1947, the total size of the Indian pharmaceutical market was about Rs10 crore. Today, pharmaceutical production in India exceeds Rs7,000 crore and exports exceed Rs2,000 crore. Moreover, although it was controlled by the multinationals till the end of the 1960s, today Indian manufacturers of bulk drugs and formulations dominate the market. And companies like Ranbaxy, Lupin, Dr.Reddy’s Laboratories and CIPLA are dreaming of becoming billion dollar companies by the year 2000 AD.
There is a common misconception that this fantastic growth has been due to stealing patented technology from the West, for the Indian Patent Act of 1970 recognises only process, not product patents. But the fact is that hardly 5per cent of the Rs2,000 crore exports are covered by product patents. The rest are off-patent drugs and, hence, we are competing in the open market with original discoverers, thereby proving the more efficient nature of our processes and manufacturing costs.
Today there are nearly 800 bulk drug manufacturers in India. Some of them are being wooed by multinationals for tie-ups involving manufacture, marketing and even joint research. Market research has shown that a large number of high selling antibiotics and cardiovascular drugs are going off-patent in the next two years. There is also a growing shift towards generic drugs in the North American market. All of which are contributing to tremendous bullishness in the industry.
Initially, most of the Indian drug manufacturers were opposed to India accepting the Paris convention on patents. But finally, recognising its acceptance as inevitable if India wants to globalise, they quickly readjusted their strategies and started exploring opportunities to grow in the global market. Ranbaxy and Dr Reddy's Laboratories have already started a nascent programme of original research into new drug molecules and Lupin plans to follow. The idea is to manipulate the molecular structure of known drugs and come out with 'me too' drugs. Later, hopefully,' path-breaking ones can follow. This is much the same route that the Japanese drug industry took in the last two decades, and the chances of success seem bright.
Ranbaxy Laboratories Ltd.
Overstressed executives might remember Ranbaxy through the popular stress reliever Calmpose. But Ranbaxy, itself, hit big time with Cefaclor. Cefaclor is today one of the largest-selling antibiotics with over a billion dollars worth of sales and one of the top ten drugs in the global market. This advanced cephalosporin, however, is a challenge to any organic chemist trying to synthesize it. According to Desh Bandhu Gupta of Lupin, the problems are compounded by the fact that the discoverer, American giant Eli Lily, made life difficult for potential competitors by patenting various intermediates as 'time bombs' that go off when you reach that stage through synthesis.
Which is why, when Ranbaxy developed their own process technology for Cefaclor and patented it in the us, they not only won a lucrative market and a number of awards in India but made a name for themselves in the pharmaceutical world. A by-product of this success is the tie-up between Eli Lily (1991-92 turnover more than $4 billion) and Ranbaxy, for a joint venture and for joint research and development.
Today, Ranbaxy is buzzing with activity. In its swank R&D centre in Gurgaon, Dr Himadri Sen, who has two decades of experience in the international pharmaceutical industry, and his group are working on novel drug delivery systems and have already come out with some controlled release products and effervescent products. Sen firmly believes that there is still a lot of juice left in the already-discovered drugs, the key is to find effective and more user-friendly ways of administering them.
The bio-technology group, led by Dr K. Kannan, a leading protein chemist, is working on developing diagnostics for hepatitis, blood grouping, pregnancy and AIDS. They are also working on vaccines. The most exciting work, however, is in stem cell-based therapy that could prove a god-send for leukemia, bone marrow transplants and may even be advantageous to the treatment of AIDS. Kannan has done pioneering fundamental work in stem cell haematology, which he is trying to develop into tangible applications.
Dr Sood, who heads the pharmaceutical research, is expecting early results in new molecular research as well. To start with, they have taken the clever route of buying five biological lead molecules and are busy testing them. Information technology is playing a major role in new molecular research by allowing instant patent search hooking into global databases; that way the team can be sure that it is not working on a molecule that was patented only last week.
Ranbaxy has already spent over Rs30 crore on its R&D centre and plans to spend more in the coming years. Dr J.M. Khanna, executive director, who heads R&D, is scouting Europe and North America for further recruits. Everyone you meet in Ranbaxy seems to parrot the goal Dr Parvinder Singh, CMD, has set for the company 'to become a research-driven global pharmaceutical company'. And they seem to be well on their way to achieving it. With a 1993-94 turnover of Rs593 crore and exports of Rs226 crore, Ranbaxy already has joint ventures for manufacture in Canada, China, Malaysia and Nigeria, and is negotiating marketing tie-ups in North America. If all goes as planned, in another two years it may well cross the Rs1000 crore turnover mark.
Lupin
Any other company faced with the same challenge might have refused to pick up the gauntlet. But Lupin decided to take up the manufacture of Vitamin B-6, one of the first technology successes for which it won awards.
Vitamin B-6 has a complex 12-stage process where some of the intermediates are unstable. Dr. A.V. Ramarao, when he was at NCL, took up the challenge amidst much scepticism from peers and came out with the process. The next major question immediately arose: Was there anyone ready to invest crores in this process, which was as yet unproven on a plant scale? Lupin took the risk and mastered this complex technology. Now, they are doubling their Vitamin B-6 capacity.
Lupin Laboratories (1993-94 turnover Rs510 crore, exports Rs100 crore) definitely seems to have arrived. It is now aiming to reach a billion dollar turnover in the highly competitive international pharmaceutical market in four years! Sounds ambitious. However, if we look carefully at the achievements and strategy of this company started by Desh Bandhu Gupta, a chemistry professor, with an initial investment of Rs5,000 in 1968, it does not seem far-fetched. While DBji as he is fondly called in Lupin is obviously a smart businessman he is also a man with tech-vision. Right now, he is firming up his plans for a world class R&D centre with an investment of Rs 100 crore and 250 to 300 personnel in the next few years.
Today, Lupin is known for its successes in basically three fields. The anti- TB drug ethambutol, of which they are the world leaders producing 60 per cent of the global production, the antibiotic rifampicin and the cephalosporins. Their ethambutol process is so efficient that even the original discoverer, Lederle, is buying the bulk drug from Lupin. The company has also gone into cardiovascular drugs that are going off patent.
In addition, the recent breakthrough made in stabilising their Rs80-crore plant devoted to fermentation products will put them ahead of the rest.
Herbal medicine for export markets is another of Lupin's ventures. Its latest venture is making herbal dressings that heal cuts without needing sutures and without leaving a scar, developed by an Indian, Dr Harbada.
Now, the several strands in Desh Bandhu Gupta's net seem to be meshing with greater cohesiveness. Lupin already has a bulk drug joint venture in Thailand and is planning more in North America, Europe and the Central Asian Republics of CIS. With drugs that sell more than $20 billion going off-patent by 2000 AD, Gupta is confident of achieving his ambition of becoming a billion dollar company by that time.
Dr Reddy's Laboratories
Dr Anji Reddy thanks Ethyl Corp, USA, a petrochemical giant, for making him famous. In 1990, Ethyl Corp accused one of Dr Reddy's companies, Cheminor, of dumping the popular analgesic, ibuprofen, in the US market. In the drama that unfolded in the hearings before the US Department of Commerce and the International trade Council, Dr Reddy proved that his prices were lower because his technology was better. As a result, the antidumping moves were dropped.
Reddy a product of UDCT and NCL, learnt the basics of bulk drug manufacturing in the public sector IDPL. From a modest turnover of Rsl.5 crore, in 1985, his group has crossed Rs300 crore in 1993-94. Now, DRL is setting up joint ventures in Russia and the Middle East.
Investing over Rs10 crore, Reddy has set up Dr Reddy's Research Foundation, (DRF) as an independent unit to develop his R&D muscle. Today, DRL can develop organic synthesis and even commercialise a process faster than anyone else in the world. There have been cases where DRL'S office in New Jersey, has faxed an order for samples of a particular molecule, along with its molecular structure and purity specifications, and the group has delivered it in three weeks. Fast work by any standards!
DRL'S current plans are ambitious: it is now developing a programme for new drug molecules, of which they hope to patent a few within a year. Their programme consists of computer-aided molecular modelling, drug designing and research in plant products.
According to Prof V.M. Kulkarni at UDCT, computer-aided, drug designing considerably reduces the time factor in obtaining the lead molecules, avoiding trial and error.
As proof of Dr Reddy's ambitious plans globalisation, today Izvestia carries as many ads of DRL as any Indian newspaper. This company, too, will hit Rs1000-crore-plus by 2000 AD.
CIPLA
The stock market heard of CIPLA when its share hit an astronomical Rs35,000 this year. What most people don't know, however, is that, CIPLA has long been a leader in anti-cancer and anti-asthma drugs and has very popular brands in fluoroquinolones and antibiotics. But what distinguishes it is its penchant for producing high value, low volume products. Some of its specialised products cost about $1,000 a gram!
One of its major triumphs was the commercialisation of the extraction of vinblastine from vinca rosea leaves, which was then converted to vincristine - a popular anticancer drug throughout the world. Earlier, Indians used to export the dried leaves of vinca rosea and Eli Lily, US, used to make vincristine out of them. The capsules, containing one thousandth of a gram of vincristine sulphate, were sold in India for Rs80each.
CIPLA scaled up the known, but difficult process of extracting the alkaloid vinblastine from vinca rosea, and then converting it to vincristine and produced a capsule that was sold at Rs25 only and even exported it abroad. Similarly, when the drug AZT, that stops the AIDS virus from multiplying, was discovered, Dr A.V. Ramarao, director, Indian Institute of Chemical Technology (IICT) and his team synthesised it and transferred the difficult technology to CIPLA. Today, CIPLA is the only producer of AZT besides the original discoverer.
If there is one company that consistently and stubbornly fought the Dunkel Draft till India signed the GAIT treaties in 1994, it is CIPLA. Dr Yusuf Hamied, MD, CIPLA still feels passionately about it. "The issue is not my company or even the industry; the issue is affordable healthcare for millions of Indian people," he says. Dr Hamied's concern is commendable considering that many in the drug industry changed tack midway.
Hamied is sceptical of new molecules being introduced by Indian companies. He says "Our undoubted strengths are in organic chemistry but our infrastructure in biological research is hardly world class." He is getting a number of offers for joint ventures and research tie-ups from Europe and is going global like the rest of the pack.
ENGINEERING
Engineering is a field where considerable activity is customized. Here, incremental innovation, design and analytical skills, concurrent engineering, and a constantly learning manpower, that takes each new job as a challenge, help build up competitive advantage. Three companies stand out in this: MTAR, BHEL and L&T.
An interesting common denominator for all the three companies, is their participation in the nuclear and space programmes. Through this they learnt new technologies of high precision machining, zero defect welding and varied non-destructive testing techniques. They have also learnt careful documentation of each stage of manufacturing leading to traceability of failure. Since each job was a challenge, their engineers were kept constantly on their toes leading to a high level of motivation. Now, they have reached a stage where besides meeting the quality standards of aerospace and nuclear programmes, they can also meet highly competitive delivery cycles and cut manufacturing costs.
MTAR
If there is one thing that characterizes Machine Tools Aids and Reconditioning (MTAR) it is their ‘can do’ attitude. Set up by ex-HMT engineer, Ravindra Reddy, MTAR, Hyderabad, is probably the largest partnership company in the south (1993-94 turnover: over Rs20 crore). In less than a decade, Reddy built up an impressive stable of more than a hundred precision tools. Recognising Reddy's capabilities the Department of Space invited him to be on the board of Antrix Corp, India's only company to market space technology globally.
MTAR's achievements include the manufacture of critical components for Pressurised Heavy Water Reactors of Nuclear Power Corporation (NPC), nuclear fuelling machines, critical components for Fast Breeder Test Reactor at Indira Gandhi Centre for Atomic Research, and the prestigious liquid fuelled rocket engine Vikas for the Polar Satellite Launch Vehicle and the Geostationary Satellite Launch Vehicle.
Another first by MTAR is the capability to manufacture world-class ball screws, varying in length from half a metre to over five metres. These ball screws are essential for any high-speed motion and are thus the mechanical heart of aircraft controls, machine tools, CNC machines, and industrial robots.
Such is the confidence of Dr Ravindra Reddy in his team that he says: "If ISRO solves all the material science problems involved in operation at -250°c, a temperature at which most metals and alloys crumble, then we guarantee that we will provide the engineering back up and deliver the cryogenic engine,"
BHEL
BHEL is synonymous with power in India. "This public sector giant with manufacturing plants at Hardwar, Trichy,
Hyderabad, Bhopal, Jhansi and Bangalore has built hydro power stations, thermal power stations, gas turbine-based
power stations and has been the single nuclear manufacturer. With its turnkey capabilities, it has joined the elite dozen powerhouses in the world such as General Electric and Siemens.
It has developed the most comprehensive welding capabilities in Trichy making it one of the best manufacturers in the world of large capacity boilers for power production, and industrial processes, besides nuclear reactor vessels, and heat recovery systems. Though they bought the technology from an assortment of companies all over the world, BHEL's strength lies in assimilating it and developing the 'know why' leading to appropriate design changes and developments.
It is the same 'know why' that has led them to develop the technology suitable for high ash coal. India, poor as it is in fossil fuel resources, has one fuel in abundance that will last another 50 years: coal. However, Indian coal has its own peculiarities- it has very low sulphur, making it cleaner in terms of sulphur dioxide emissions, but on the negative side it has low calorific value and high ash content. BHEL thus produced fluidised bed boilers that can very efficiently bum high ash coal, lignite, rice husk, bagasse and other agricultural wastes, literally anything.
In addition, they have developed specialised R&D strengths and designed appropriate conventional boilers for Indian coal. One important development is the large tower type boilers (almost twenty storey high) for 210 MW power stations. The novel design is easier to erect and fabricate there by reducing delivery times.
Direct ignition of pulverised coal (DIPC) developed by BHEL's R&D leads to considerable saving of oil in thermal power stations. If all thermal power stations in India were to use this technology then Rs.1 ,000 crore could be saved annually.
BHEL has also put its thorough understanding of power systems to good use by making the appropriate changes to extend the life of old thermal plants. This requires complex computer simulation, stress, creep and fracture analysis of materials, on-line data analysis, and is a growing area of business for them. Soon this should contribute at least Rs.100crore annually to their revenue. Thus, an old plant running at say a 30 per cent plant load factor (PLF), can be run at a much higher PLF. The additional mega wattage is obtained at a cost of Rs 1 crore per megawatt only, a Godsend to energy and capital-starved power infrastructure.
BHEL's technology strength is reflected in the fact that the German giant, KWU which supplied it the gas turbine technology has itself placed orders for three gas turbines of 60 MW each; Reliance,- well-known for its technology scouting capabilities, has placed orders for two combined cycle gas turbine generators for its Hazira petrochemical project; and Malaysia has repeatedly placed orders for gas turbines and thermal power stations. All these have been won amidst stiff international competition.
That is why despite high overheads like its 74,000-strong work force, large townships, etc, BHEL truly has the potential to emerge as an international engineering giant.
L&T
This multi-product company that is into switch gears, cement, electronics, construction and heavy engineering is familiar to many for its board room intrigues in the last five years. But only a small number of people know the technology and engineering strengths in its heavy engineering division.
L&T became a hi-tech, heavy engineering company through its association with the nuclear programme. Prior to the 1970’s they were making some small cement plant and dairy equipment. Fabrications were of the order of about five tonnes. Now, in their Hazira plant, they can fabricate equipment weighing 450 tonnes or more. Thus, while orders have dried up from the nuclear programme, the expertise in engineering, design, analysis and simulation are being built upon to take on bigger challenges.
The thrust of L&T'S effort in heavy engineering is to be recognised as a turnkey Engineering Project Contractor - the coveted goal of any heavy engineering firm globally.
Metallurgy
Mukand
In ferrous metallurgy, basic process technology evolves slowly and gets accepted even more -slowly. Everyone, it seems, wants proven technology rather than taking risks with new ones. The large investments required naturally make one extremely cautious, if not downright conservative. However, Mukand's CMD, Viren Shah, took the plunge and made the bold decision of going for continuous casting technology. Today, the technology is common. But the fact remains that in the late 1960s only two plants in the world had opted for it, though technically it was clear that continuous casting would be more efficient. The third plant to adopt this technology in the world and the first in Asia, including Japan, was Mukand.
Mukand has been a pioneer in more ways than one. In steel refining technology, too, Rourkela Steel Plant and Mukand were pioneers, going for the new top and bottom oxygen-blowing process. Today, all over the world this technology has become the standard in refining.
Mukand's main product line is high quality wire rods. Their R&D team led by Dr R.H.G. Rao, vice-president, technical, has been improving the quality of wire rods while reducing the cost of production. Wire rods that are mainly used by the fastener industry for cold heading need to have special qualities which can only be achieved through advanced refining techniques.
With the upturn in the automobile industry, Mukand's sales have picked up considerably in 1994. It is also developing leaded steels required by the automobile industry. In ferrous metallurgy Mukand is definitely a company to watch.
Aerospace
Antrix Corp
While we have not much to show in aircrafts we have some thing to show in space. Our remote sensing satellite's and communication satellites are world class products. So the Department of Space of the Government of India set up Antrix Corporation to globally market India's space technology. The tie up between Antrix Corp and Eosat US, for distributing Indian remote sensing data in the highly competitive North American market has hit the headlines recently.
N. Sampath, executive director, Antrix Corp, says, "Liquid nitrogen costs in India are high and we need about a million litres of it to test a satellite in the space simulation chamber. Though component costs are much higher in India, still it works out cheaper to fabricate satellites here rather than in the US or Europe by 20-30 per cent. For I can get highly skilled MTechs and PhDs to do the job at less than 10 per cent of their cost in the US or Europe."
However, international competition in the satellite market has become cut-throat. More than 50 per cent of the satellite market used to be in the military sector which has been drastically reduced. So all the biggies like Hughes, Martin Marietta (GE), Loral Aerospace (Ford), and others are aiming at the civilian market. Though Antrix, on its own, stands little chance of getting any orders in the global market, Loral wants to tie up with it and this should stand the company in good stead.
This fledgling hi-tech company can really hit it big in the future. As a communication revolution sweeps over India in the next five to ten years, there will be a big demand for communication satellites for TV and telecom. At that time, no doubt, Antrix will come into its own.
Automobiles
Telco (Now Tata Motors)
Is there someone out there who can give Maruti a run for their money? We think Telco has the potential not only to do that but even to enter the global car market. One other plus point in favour of Telco: it has an R&D facility that does not even exist in Maruti.
The visionary behind this was undoubtedly its former chairman, the late Sumant Mulgaokar. The first all-new Telco product was the Tata 407, introduced in 1985. It was conceived, designed, developed and productionised in 18 months flat to take on the just-introduced Indo-Japanese light commercial vehicles (LCVS). Today, Telco has over a 50 per cent share of the LCV market.
Amongst all Indian automobile companies, Telco's ERC is, by far, the largest R&D set-up, employing over 800 highly qualified engineers and designers. Headed by R&D general manager, S.K. Shome, its employees and equipment rank amongst the best in the world. A full-fledged, 98-terminal IBM RS/6000 CAD system costing nearly Rs.80 crore helps Telco generate concept proposals through to wire-frame diagrams, designing the inner skins, analysing structural integrity, generating cross-sectional views and defining the templates required to make the, final mock-up.
All sophisticated equipment, however, is quite meaningless without the right people handling it. Telco's resident director, V.M. Rawal, points out: "Technology is of no use if you don't have good people. It's the dedication of the people that really matters. The sophisticated Rambaudi machine was being put to use in two weeks flat, with
no special, training programme. It was taken up as a challenge." At the same time, Telco is not trying to reinvent the wheel. After developing the engine and the body design, for fine tuning them they are using the state-of-the-art services of the likes of International Automotive Design, UK, and AVL, Austria.
In conclusion, our techies may not be at the cutting edge of technology but all of them have used the Indian strengths in knowledge engineering and that too in an atmosphere that did not call for it. Thus they stand out for their farsightedness.-
N. Vaghul, chairman, ICICI is optimistic of the future. "The real industrialisation has started only now. Every businessman I meet nowadays, small or big, talks of technology and is aware that without technology he will be sunk," he, says. If these words are really a prophecy of things to come, we'll be seeing a lot more of the Indian 'techies' from now on.
Leaders in Technology
By and large the Indian corporate sector showed little ability to cope with technology development during the Licence Raj. However, less than a dozen companies have achieved technological excellence that is being globally recognized. The investment in technology development by these ‘techies’ is now paying off.
Shivanand Kanavi
Corporate success worldwide has long been fuelled by technology. But since the 1970s, it has become even more crucial as several technology –strong newcomers hit pay dirt and became mega players in the global marketplace. These companies, called ‘techies’ by Wall Street analysts, are being regularly tracked.
However, the important questions for us are: Does India have its own ‘techies’? If yes, who are they? What has lent them the drive to succeed and who are the people who head them?
Some people feel that these questions are irrelevant at present. They argue that the overwhelming atmosphere for four decades after independence has been that of licensed production in a protected market. Indian businessmen have shown an inability to cope with technology development and have largely used their R&D divisions for tax benefits. So, under the circumstances, how can a technology-driven company emerge, they ask.
Does that mean we have to wait another couple of decades to see technological excellence in some Indian companies? Well, yes and no. Though we don't have a Bill Gates or a Seymour Cray in India as yet, there area a handful of examples of technological excellence in the middle level who are being globally recognised.
This handful of Indian techies that we short listed are clear winners within restricted parameters. They shown farsightedness in either developing their own manufacturing technologies (as in the case of agrochemical and bulk drug companies) or in buying it, mastering it and developing it further, thereby acquiring the know-why (as in engineering). As a result, now when the Indian economy is being thrown open to competition, these companies are more ready than others to take on new challenges.
A feature common to all these leaders in technology was that they are led by men who are themselves technologists or those with tech vision- like Dr. Gharda, Dr Parvinder Singh, Dr. Hamied, Dr. Anji Reddy, Desh Bandhu Gupta, Ravindra Reddy, etc. Surprisingly, the large companies in the corporate sector- Reliance, ITC, ACC, Grasim and Hindustan Lever- have done hardly any technology development compared to their resources and scale of operations. One of the many reasons they do not feature on the shortlist. Their success, according to Business India, is largely due to good financial management, economies of scale, marketing, and technology scouting for initial buying.
The only exceptions to this large-company rule are Telco, BHEL and L&T. Even here, though they are no doubt technology –driven companies, one has to tread with caution. For, most of them are multi-product and multi-plant companies, where technology leadership, it does exist, is uneven; and the impact of a particular innovation on the overall company or industry becomes difficult to evaluate. Thus, L&T may be doing brilliant work in terms of heavy fabrication for the nuclear and space programmes, or petrochemicals but the other sections, like cement, are far from technologically superior. By and large, however, the need to be proactive, ready to experiment and take risks, which are essential for technology leadership, are sorely lacking in the large companies.
Surprisingly the techies do not consist of idiosyncratic geniuses but rather dynamic engineers, technologists and R&D personnel who exhibit good market savvy and are incredibly self-assured. Most of the personnel in these companies enjoy the challenges of the job, love the atmosphere of relative autonomy, the elbowroom to experiment and the opportunity to learn from mistakes. And, finally, they live to see their ideas or innovations actually move from lab into production and get a charge out of competing with like-minded individuals in the marketplace. Obviously, in the world of the technology-driven, the intellectual challenge is everything.
So, which are these centres of technological excellence among our midst? What makes them tick? This is what Business India found out..
Agrochemicals
This is a sector that has seen a number of Indian companies coming out with innovative processes and successfully competing with multinationals, both in the domestic and international markets. Gharda Chemicals, Excel Industries, United Phosphorus, Lupin, have all done very well by becoming major players in technical grade agrochemicals, that is, pure agrochemical concentrate that is later diluted using various solvents and sold in the retail market. But even among this pack, one company stands out as a real techy: Gharda Chemicals:
Gharda Chemicals
Perhaps, the incident that , best sums up Dr Keki Gharda, the leader of Gharda Chemicals, is illustrated by a story that has become part of Indian chemical industry folklore. In the early 1980s, Dr Gharda was invited to an MRTP commission hearing which revolved around a multinational's application for a licence to produce isoproturon. Some Indian companies objected to the application for fear that they would not be able to compete. But Dr Gharda, alone, was of the opinion that there was nothing superior about the multinational's technology. To prove his point, he declared that his company would introduce a new, more efficient process within 18 months and compete with the multinational.
Most of the people who comprised the stunned audience that day would not have imagined that Gharda would be able to pull it off. But he did. True to his words, Gharda realised the danger of using the highly toxic isocyanate route in making pesticides, and came out with a process to produce isoproturon, using urea. Today, he is the second largest producer of isoproturon in the world with large exports to Europe, US and the Far East. The superiority of Gharda's process, which is today internationally known as the ‘Indian process', made even Rhone Poulenc, the European giant which had a monopoly in isoproturon earlier, sweat.
Since then, Gharda Chemicals has become the leading Indian company in technical grade agrochemicals. Cypermethrin - a popular insecticide; cypermethric acid chloride - an intermediate for cypermethrin; anilophos - a herbicide used, for rice, originally discovered by Hoechst though it now uses Gharda's process; chlorpyrifos- a new generation insecticide; and napropamide -- another herbicide, have all made Gharda a power to reckon with in the global agrochemical scene. In the last three years, a number of international agrochemical magazines have written about Gharda and even put him on their cover.
Gharda Chemcals started as a three –men-in- a-garage operation in the late 1960s, in Santacruz, a suburb of Bombay. Dr. Keki Gharda who had returned from the US after PhD in Chemical Engineering from the University of Michigan, Ann Arbor, joined the faculty of University Department of Chemical Technology (UDCT), Bombay. However, he could not get a permanent teaching position and he turned instead to industry.
His first success, in the field o dyestuffs, came fast. He synthesized pthalogen blue, a dye that was very popular in the textile industry but had to be imported from Germany. Later azo-dyes provided the bread and butter. However, with the tremendous proliferation of process technology in the small-scale sector, dyestuff manufacturing was no longer as attractive, so Gharda changed course midstream into agro-chemicals.
This time it was not as easy. The early 1980s, the years of transition, were difficult. As a plant engineer in Gharda’s Lote factory remarked, “In those days we were literally living hand to mouth. But unlike other industrialists, Dr. Gharda did not retrench any of the R&D staff. The later years vindicated his visionary faith in in-house R&D”.
That vision has helped him to move with the times. When quality and purity export markets of Europe, Gharda changed tack too. Today, his analytical lab is not only top class but has made a number of original contributions: half a dozen of them (in Fourier Transform Infra Red spectroscopy and in High Pressure Liquid Chromatography) have become part of international standards.
Today, Gharda is going through another round of diversification into bulk: drugs and engineering plastics. But why get into bulk drugs when there are so many players already? "While the Indian' bulk drug industry is strong in organic synthesis, they are not so strong in chemical engineering," answers Gharda. “With our strength in both, we will be ore efficient.” Typically, they are building plants for products that are yet to come out of their R&D.
But this confidence has got him his fair share of detractors. “He is and eccentric,” says an indignant major player in bulk drug manufacture. “He wants to spoil the bulk drug market by driving down the prices.” His anger is partly fuelled by the not-so-polite letter he received from Dr. Gharda, which categorically stated that since Gharda Chemicals is going to enter the bulk drugs market in fluroquinolones at a lower price, the existing competitors might as well quit!
Therein lies the essence of the man. Variously described in the industry as a missionary, a Gandhian, an eccentric, and a spoilsport, he has nevertheless always approached the market in his own unique manner. His strategy is to come out with new products at prices that are at least 20-30 per cent lower than the prevailing ones and hold them at that level for years. Aside from driving the competition out of the market, it even makes giant multinationals wary of him. Perhaps one of the reasons why, today, some of them are queuing up to tie up with him.
And he lives by his own rules. For examples, though he has received many awards for novel processes, he has not patented any. He believes that the superiority of technology should be decided in the marketplace rather than in court rooms. He also shies away from breaking up the manufacturing process into a number of stages and carrying these out in different plants to guard hi trade secrets, as most of his competitors do. “This will lead to the right hand not knowing what the left is doing. And you would lose the team spirit where you troubleshoot together and learn from each other” he says. “The name of the game is to come up with newer and better processes and products through R&D and always stay a step ahead of the competition.”
Which he has done. Gharda’s turnover in 1993-94 is Rs 170 crore; exports: Rs30 crore, but with the smooth functioning of the new cypermethric acid chloride and alphamethrin plants at Lote, the 1994-95 results are expected to show at least a 30 per cent growth. Already the profit before depreciation and tax is a hefty Rs45 crore, i.e. 26.5 per cent. Despite the fact that Gharda is not into formulation and retail marketing in a big way, we believe that it will become a diversified Rs 1000-crore-plus company by 2000AD
Pharmaceuticals
Off all the sectors that have seen growth, the pharmaceuticals sector is probably the most dramatic. In 1947, the total size of the Indian pharmaceutical market was about Rs10 crore. Today, pharmaceutical production in India exceeds Rs7,000 crore and exports exceed Rs2,000 crore. Moreover, although it was controlled by the multinationals till the end of the 1960s, today Indian manufacturers of bulk drugs and formulations dominate the market. And companies like Ranbaxy, Lupin, Dr.Reddy’s Laboratories and CIPLA are dreaming of becoming billion dollar companies by the year 2000 AD.
There is a common misconception that this fantastic growth has been due to stealing patented technology from the West, for the Indian Patent Act of 1970 recognises only process, not product patents. But the fact is that hardly 5per cent of the Rs2,000 crore exports are covered by product patents. The rest are off-patent drugs and, hence, we are competing in the open market with original discoverers, thereby proving the more efficient nature of our processes and manufacturing costs.
Today there are nearly 800 bulk drug manufacturers in India. Some of them are being wooed by multinationals for tie-ups involving manufacture, marketing and even joint research. Market research has shown that a large number of high selling antibiotics and cardiovascular drugs are going off-patent in the next two years. There is also a growing shift towards generic drugs in the North American market. All of which are contributing to tremendous bullishness in the industry.
Initially, most of the Indian drug manufacturers were opposed to India accepting the Paris convention on patents. But finally, recognising its acceptance as inevitable if India wants to globalise, they quickly readjusted their strategies and started exploring opportunities to grow in the global market. Ranbaxy and Dr Reddy's Laboratories have already started a nascent programme of original research into new drug molecules and Lupin plans to follow. The idea is to manipulate the molecular structure of known drugs and come out with 'me too' drugs. Later, hopefully,' path-breaking ones can follow. This is much the same route that the Japanese drug industry took in the last two decades, and the chances of success seem bright.
Ranbaxy Laboratories Ltd.
Overstressed executives might remember Ranbaxy through the popular stress reliever Calmpose. But Ranbaxy, itself, hit big time with Cefaclor. Cefaclor is today one of the largest-selling antibiotics with over a billion dollars worth of sales and one of the top ten drugs in the global market. This advanced cephalosporin, however, is a challenge to any organic chemist trying to synthesize it. According to Desh Bandhu Gupta of Lupin, the problems are compounded by the fact that the discoverer, American giant Eli Lily, made life difficult for potential competitors by patenting various intermediates as 'time bombs' that go off when you reach that stage through synthesis.
Which is why, when Ranbaxy developed their own process technology for Cefaclor and patented it in the us, they not only won a lucrative market and a number of awards in India but made a name for themselves in the pharmaceutical world. A by-product of this success is the tie-up between Eli Lily (1991-92 turnover more than $4 billion) and Ranbaxy, for a joint venture and for joint research and development.
Today, Ranbaxy is buzzing with activity. In its swank R&D centre in Gurgaon, Dr Himadri Sen, who has two decades of experience in the international pharmaceutical industry, and his group are working on novel drug delivery systems and have already come out with some controlled release products and effervescent products. Sen firmly believes that there is still a lot of juice left in the already-discovered drugs, the key is to find effective and more user-friendly ways of administering them.
The bio-technology group, led by Dr K. Kannan, a leading protein chemist, is working on developing diagnostics for hepatitis, blood grouping, pregnancy and AIDS. They are also working on vaccines. The most exciting work, however, is in stem cell-based therapy that could prove a god-send for leukemia, bone marrow transplants and may even be advantageous to the treatment of AIDS. Kannan has done pioneering fundamental work in stem cell haematology, which he is trying to develop into tangible applications.
Dr Sood, who heads the pharmaceutical research, is expecting early results in new molecular research as well. To start with, they have taken the clever route of buying five biological lead molecules and are busy testing them. Information technology is playing a major role in new molecular research by allowing instant patent search hooking into global databases; that way the team can be sure that it is not working on a molecule that was patented only last week.
Ranbaxy has already spent over Rs30 crore on its R&D centre and plans to spend more in the coming years. Dr J.M. Khanna, executive director, who heads R&D, is scouting Europe and North America for further recruits. Everyone you meet in Ranbaxy seems to parrot the goal Dr Parvinder Singh, CMD, has set for the company 'to become a research-driven global pharmaceutical company'. And they seem to be well on their way to achieving it. With a 1993-94 turnover of Rs593 crore and exports of Rs226 crore, Ranbaxy already has joint ventures for manufacture in Canada, China, Malaysia and Nigeria, and is negotiating marketing tie-ups in North America. If all goes as planned, in another two years it may well cross the Rs1000 crore turnover mark.
Lupin
Any other company faced with the same challenge might have refused to pick up the gauntlet. But Lupin decided to take up the manufacture of Vitamin B-6, one of the first technology successes for which it won awards.
Vitamin B-6 has a complex 12-stage process where some of the intermediates are unstable. Dr. A.V. Ramarao, when he was at NCL, took up the challenge amidst much scepticism from peers and came out with the process. The next major question immediately arose: Was there anyone ready to invest crores in this process, which was as yet unproven on a plant scale? Lupin took the risk and mastered this complex technology. Now, they are doubling their Vitamin B-6 capacity.
Lupin Laboratories (1993-94 turnover Rs510 crore, exports Rs100 crore) definitely seems to have arrived. It is now aiming to reach a billion dollar turnover in the highly competitive international pharmaceutical market in four years! Sounds ambitious. However, if we look carefully at the achievements and strategy of this company started by Desh Bandhu Gupta, a chemistry professor, with an initial investment of Rs5,000 in 1968, it does not seem far-fetched. While DBji as he is fondly called in Lupin is obviously a smart businessman he is also a man with tech-vision. Right now, he is firming up his plans for a world class R&D centre with an investment of Rs 100 crore and 250 to 300 personnel in the next few years.
Today, Lupin is known for its successes in basically three fields. The anti- TB drug ethambutol, of which they are the world leaders producing 60 per cent of the global production, the antibiotic rifampicin and the cephalosporins. Their ethambutol process is so efficient that even the original discoverer, Lederle, is buying the bulk drug from Lupin. The company has also gone into cardiovascular drugs that are going off patent.
In addition, the recent breakthrough made in stabilising their Rs80-crore plant devoted to fermentation products will put them ahead of the rest.
Herbal medicine for export markets is another of Lupin's ventures. Its latest venture is making herbal dressings that heal cuts without needing sutures and without leaving a scar, developed by an Indian, Dr Harbada.
Now, the several strands in Desh Bandhu Gupta's net seem to be meshing with greater cohesiveness. Lupin already has a bulk drug joint venture in Thailand and is planning more in North America, Europe and the Central Asian Republics of CIS. With drugs that sell more than $20 billion going off-patent by 2000 AD, Gupta is confident of achieving his ambition of becoming a billion dollar company by that time.
Dr Reddy's Laboratories
Dr Anji Reddy thanks Ethyl Corp, USA, a petrochemical giant, for making him famous. In 1990, Ethyl Corp accused one of Dr Reddy's companies, Cheminor, of dumping the popular analgesic, ibuprofen, in the US market. In the drama that unfolded in the hearings before the US Department of Commerce and the International trade Council, Dr Reddy proved that his prices were lower because his technology was better. As a result, the antidumping moves were dropped.
Reddy a product of UDCT and NCL, learnt the basics of bulk drug manufacturing in the public sector IDPL. From a modest turnover of Rsl.5 crore, in 1985, his group has crossed Rs300 crore in 1993-94. Now, DRL is setting up joint ventures in Russia and the Middle East.
Investing over Rs10 crore, Reddy has set up Dr Reddy's Research Foundation, (DRF) as an independent unit to develop his R&D muscle. Today, DRL can develop organic synthesis and even commercialise a process faster than anyone else in the world. There have been cases where DRL'S office in New Jersey, has faxed an order for samples of a particular molecule, along with its molecular structure and purity specifications, and the group has delivered it in three weeks. Fast work by any standards!
DRL'S current plans are ambitious: it is now developing a programme for new drug molecules, of which they hope to patent a few within a year. Their programme consists of computer-aided molecular modelling, drug designing and research in plant products.
According to Prof V.M. Kulkarni at UDCT, computer-aided, drug designing considerably reduces the time factor in obtaining the lead molecules, avoiding trial and error.
As proof of Dr Reddy's ambitious plans globalisation, today Izvestia carries as many ads of DRL as any Indian newspaper. This company, too, will hit Rs1000-crore-plus by 2000 AD.
CIPLA
The stock market heard of CIPLA when its share hit an astronomical Rs35,000 this year. What most people don't know, however, is that, CIPLA has long been a leader in anti-cancer and anti-asthma drugs and has very popular brands in fluoroquinolones and antibiotics. But what distinguishes it is its penchant for producing high value, low volume products. Some of its specialised products cost about $1,000 a gram!
One of its major triumphs was the commercialisation of the extraction of vinblastine from vinca rosea leaves, which was then converted to vincristine - a popular anticancer drug throughout the world. Earlier, Indians used to export the dried leaves of vinca rosea and Eli Lily, US, used to make vincristine out of them. The capsules, containing one thousandth of a gram of vincristine sulphate, were sold in India for Rs80each.
CIPLA scaled up the known, but difficult process of extracting the alkaloid vinblastine from vinca rosea, and then converting it to vincristine and produced a capsule that was sold at Rs25 only and even exported it abroad. Similarly, when the drug AZT, that stops the AIDS virus from multiplying, was discovered, Dr A.V. Ramarao, director, Indian Institute of Chemical Technology (IICT) and his team synthesised it and transferred the difficult technology to CIPLA. Today, CIPLA is the only producer of AZT besides the original discoverer.
If there is one company that consistently and stubbornly fought the Dunkel Draft till India signed the GAIT treaties in 1994, it is CIPLA. Dr Yusuf Hamied, MD, CIPLA still feels passionately about it. "The issue is not my company or even the industry; the issue is affordable healthcare for millions of Indian people," he says. Dr Hamied's concern is commendable considering that many in the drug industry changed tack midway.
Hamied is sceptical of new molecules being introduced by Indian companies. He says "Our undoubted strengths are in organic chemistry but our infrastructure in biological research is hardly world class." He is getting a number of offers for joint ventures and research tie-ups from Europe and is going global like the rest of the pack.
ENGINEERING
Engineering is a field where considerable activity is customized. Here, incremental innovation, design and analytical skills, concurrent engineering, and a constantly learning manpower, that takes each new job as a challenge, help build up competitive advantage. Three companies stand out in this: MTAR, BHEL and L&T.
An interesting common denominator for all the three companies, is their participation in the nuclear and space programmes. Through this they learnt new technologies of high precision machining, zero defect welding and varied non-destructive testing techniques. They have also learnt careful documentation of each stage of manufacturing leading to traceability of failure. Since each job was a challenge, their engineers were kept constantly on their toes leading to a high level of motivation. Now, they have reached a stage where besides meeting the quality standards of aerospace and nuclear programmes, they can also meet highly competitive delivery cycles and cut manufacturing costs.
MTAR
If there is one thing that characterizes Machine Tools Aids and Reconditioning (MTAR) it is their ‘can do’ attitude. Set up by ex-HMT engineer, Ravindra Reddy, MTAR, Hyderabad, is probably the largest partnership company in the south (1993-94 turnover: over Rs20 crore). In less than a decade, Reddy built up an impressive stable of more than a hundred precision tools. Recognising Reddy's capabilities the Department of Space invited him to be on the board of Antrix Corp, India's only company to market space technology globally.
MTAR's achievements include the manufacture of critical components for Pressurised Heavy Water Reactors of Nuclear Power Corporation (NPC), nuclear fuelling machines, critical components for Fast Breeder Test Reactor at Indira Gandhi Centre for Atomic Research, and the prestigious liquid fuelled rocket engine Vikas for the Polar Satellite Launch Vehicle and the Geostationary Satellite Launch Vehicle.
Another first by MTAR is the capability to manufacture world-class ball screws, varying in length from half a metre to over five metres. These ball screws are essential for any high-speed motion and are thus the mechanical heart of aircraft controls, machine tools, CNC machines, and industrial robots.
Such is the confidence of Dr Ravindra Reddy in his team that he says: "If ISRO solves all the material science problems involved in operation at -250°c, a temperature at which most metals and alloys crumble, then we guarantee that we will provide the engineering back up and deliver the cryogenic engine,"
BHEL
BHEL is synonymous with power in India. "This public sector giant with manufacturing plants at Hardwar, Trichy,
Hyderabad, Bhopal, Jhansi and Bangalore has built hydro power stations, thermal power stations, gas turbine-based
power stations and has been the single nuclear manufacturer. With its turnkey capabilities, it has joined the elite dozen powerhouses in the world such as General Electric and Siemens.
It has developed the most comprehensive welding capabilities in Trichy making it one of the best manufacturers in the world of large capacity boilers for power production, and industrial processes, besides nuclear reactor vessels, and heat recovery systems. Though they bought the technology from an assortment of companies all over the world, BHEL's strength lies in assimilating it and developing the 'know why' leading to appropriate design changes and developments.
It is the same 'know why' that has led them to develop the technology suitable for high ash coal. India, poor as it is in fossil fuel resources, has one fuel in abundance that will last another 50 years: coal. However, Indian coal has its own peculiarities- it has very low sulphur, making it cleaner in terms of sulphur dioxide emissions, but on the negative side it has low calorific value and high ash content. BHEL thus produced fluidised bed boilers that can very efficiently bum high ash coal, lignite, rice husk, bagasse and other agricultural wastes, literally anything.
In addition, they have developed specialised R&D strengths and designed appropriate conventional boilers for Indian coal. One important development is the large tower type boilers (almost twenty storey high) for 210 MW power stations. The novel design is easier to erect and fabricate there by reducing delivery times.
Direct ignition of pulverised coal (DIPC) developed by BHEL's R&D leads to considerable saving of oil in thermal power stations. If all thermal power stations in India were to use this technology then Rs.1 ,000 crore could be saved annually.
BHEL has also put its thorough understanding of power systems to good use by making the appropriate changes to extend the life of old thermal plants. This requires complex computer simulation, stress, creep and fracture analysis of materials, on-line data analysis, and is a growing area of business for them. Soon this should contribute at least Rs.100crore annually to their revenue. Thus, an old plant running at say a 30 per cent plant load factor (PLF), can be run at a much higher PLF. The additional mega wattage is obtained at a cost of Rs 1 crore per megawatt only, a Godsend to energy and capital-starved power infrastructure.
BHEL's technology strength is reflected in the fact that the German giant, KWU which supplied it the gas turbine technology has itself placed orders for three gas turbines of 60 MW each; Reliance,- well-known for its technology scouting capabilities, has placed orders for two combined cycle gas turbine generators for its Hazira petrochemical project; and Malaysia has repeatedly placed orders for gas turbines and thermal power stations. All these have been won amidst stiff international competition.
That is why despite high overheads like its 74,000-strong work force, large townships, etc, BHEL truly has the potential to emerge as an international engineering giant.
L&T
This multi-product company that is into switch gears, cement, electronics, construction and heavy engineering is familiar to many for its board room intrigues in the last five years. But only a small number of people know the technology and engineering strengths in its heavy engineering division.
L&T became a hi-tech, heavy engineering company through its association with the nuclear programme. Prior to the 1970’s they were making some small cement plant and dairy equipment. Fabrications were of the order of about five tonnes. Now, in their Hazira plant, they can fabricate equipment weighing 450 tonnes or more. Thus, while orders have dried up from the nuclear programme, the expertise in engineering, design, analysis and simulation are being built upon to take on bigger challenges.
The thrust of L&T'S effort in heavy engineering is to be recognised as a turnkey Engineering Project Contractor - the coveted goal of any heavy engineering firm globally.
Metallurgy
Mukand
In ferrous metallurgy, basic process technology evolves slowly and gets accepted even more -slowly. Everyone, it seems, wants proven technology rather than taking risks with new ones. The large investments required naturally make one extremely cautious, if not downright conservative. However, Mukand's CMD, Viren Shah, took the plunge and made the bold decision of going for continuous casting technology. Today, the technology is common. But the fact remains that in the late 1960s only two plants in the world had opted for it, though technically it was clear that continuous casting would be more efficient. The third plant to adopt this technology in the world and the first in Asia, including Japan, was Mukand.
Mukand has been a pioneer in more ways than one. In steel refining technology, too, Rourkela Steel Plant and Mukand were pioneers, going for the new top and bottom oxygen-blowing process. Today, all over the world this technology has become the standard in refining.
Mukand's main product line is high quality wire rods. Their R&D team led by Dr R.H.G. Rao, vice-president, technical, has been improving the quality of wire rods while reducing the cost of production. Wire rods that are mainly used by the fastener industry for cold heading need to have special qualities which can only be achieved through advanced refining techniques.
With the upturn in the automobile industry, Mukand's sales have picked up considerably in 1994. It is also developing leaded steels required by the automobile industry. In ferrous metallurgy Mukand is definitely a company to watch.
Aerospace
Antrix Corp
While we have not much to show in aircrafts we have some thing to show in space. Our remote sensing satellite's and communication satellites are world class products. So the Department of Space of the Government of India set up Antrix Corporation to globally market India's space technology. The tie up between Antrix Corp and Eosat US, for distributing Indian remote sensing data in the highly competitive North American market has hit the headlines recently.
N. Sampath, executive director, Antrix Corp, says, "Liquid nitrogen costs in India are high and we need about a million litres of it to test a satellite in the space simulation chamber. Though component costs are much higher in India, still it works out cheaper to fabricate satellites here rather than in the US or Europe by 20-30 per cent. For I can get highly skilled MTechs and PhDs to do the job at less than 10 per cent of their cost in the US or Europe."
However, international competition in the satellite market has become cut-throat. More than 50 per cent of the satellite market used to be in the military sector which has been drastically reduced. So all the biggies like Hughes, Martin Marietta (GE), Loral Aerospace (Ford), and others are aiming at the civilian market. Though Antrix, on its own, stands little chance of getting any orders in the global market, Loral wants to tie up with it and this should stand the company in good stead.
This fledgling hi-tech company can really hit it big in the future. As a communication revolution sweeps over India in the next five to ten years, there will be a big demand for communication satellites for TV and telecom. At that time, no doubt, Antrix will come into its own.
Automobiles
Telco (Now Tata Motors)
Is there someone out there who can give Maruti a run for their money? We think Telco has the potential not only to do that but even to enter the global car market. One other plus point in favour of Telco: it has an R&D facility that does not even exist in Maruti.
The visionary behind this was undoubtedly its former chairman, the late Sumant Mulgaokar. The first all-new Telco product was the Tata 407, introduced in 1985. It was conceived, designed, developed and productionised in 18 months flat to take on the just-introduced Indo-Japanese light commercial vehicles (LCVS). Today, Telco has over a 50 per cent share of the LCV market.
Amongst all Indian automobile companies, Telco's ERC is, by far, the largest R&D set-up, employing over 800 highly qualified engineers and designers. Headed by R&D general manager, S.K. Shome, its employees and equipment rank amongst the best in the world. A full-fledged, 98-terminal IBM RS/6000 CAD system costing nearly Rs.80 crore helps Telco generate concept proposals through to wire-frame diagrams, designing the inner skins, analysing structural integrity, generating cross-sectional views and defining the templates required to make the, final mock-up.
All sophisticated equipment, however, is quite meaningless without the right people handling it. Telco's resident director, V.M. Rawal, points out: "Technology is of no use if you don't have good people. It's the dedication of the people that really matters. The sophisticated Rambaudi machine was being put to use in two weeks flat, with
no special, training programme. It was taken up as a challenge." At the same time, Telco is not trying to reinvent the wheel. After developing the engine and the body design, for fine tuning them they are using the state-of-the-art services of the likes of International Automotive Design, UK, and AVL, Austria.
In conclusion, our techies may not be at the cutting edge of technology but all of them have used the Indian strengths in knowledge engineering and that too in an atmosphere that did not call for it. Thus they stand out for their farsightedness.-
N. Vaghul, chairman, ICICI is optimistic of the future. "The real industrialisation has started only now. Every businessman I meet nowadays, small or big, talks of technology and is aware that without technology he will be sunk," he, says. If these words are really a prophecy of things to come, we'll be seeing a lot more of the Indian 'techies' from now on.
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