India has ‘bright future’ in global supply chain: Former PepsiCo CEO Indra Nooyi

Indra Nooyi also spoke of ease of doing business in India, stating that it would be “key” to ensure that the ecosystem provides opportunities not just for large companies, but also for small and medium sized enterprises (Image Source: Reuters)

Former PepsiCo CEO Indra Nooyi is very positive on India’s potential on the world stage. Lauding India’s approach to the COVID-19 pandemic, she said it was now important to control critical components of the global supply chain.

In conversation with NITI Aayog Chief Amitabh Kant on 'India's Potential in the 21st Century' during the Amazon Sambhav summit on April 15, Nooyi said India had navigated the COVID-19 pandemic “quite well”.

She added that India had been resilient despite the density of population in the urban areas and has managed to control the coronavirus better than many other countries in the world.

“But now, coming out of COVID, India has to really rethink its place in the global supply chain, in terms of manufacturing control and what critical supplies it will manufacture, because COVID has shown us that if you don’t control the critical components you could be left holding the negative end of the supply chain… with PPE, vaccines and critical drugs unavailable,” she noted.

Nooyi has pointed out India’s population, which necessitates manufacture not only for export but to meet domestic requirements as well. She said that the scale of production could bring down costs.

“India is a country with almost 1.2-1.3 billion people and it is not as if you have to manufacture just for exports, you need to manufacture for India. And because you have the scale, you can also be low cost. And based on the low cost production for India, you can now export. So, I think this is an exciting time for India,” she explained.

Nooyi was also of the opinion that, if ‘self-sufficiency’ was approached in a systematic manner, India could become a major centre for all critical components such as life-saving drugs, vaccines, PPEs and ventilators.

“(India) can be an innovative, low cost, high scale manufacturing country and I am sincerely hoping that people like Amitabh Kant get involved with the Indian government to think through what India’s supply chain should be and how it can build the entire manufacturing ecosystem,” she added.

Nooyi also spoke of ease of doing business in India, stating that it would be ‘key’ to ensure that the ecosystem provides opportunities not just for large companies, but also for small and medium sized enterprises.

“But (this) requires thinking very carefully about the future products you want to manufacture as opposed to all products that could sunset. So very important that you think about what role you want to play in the future? And what kind of ecosystems are you going to build for India and for export?” she added.

She also felt that India was “in the right direction” but reiterated points to consider. These include commitment to education, including reskilling, and commitment to product quality.

For the second she gave the example of 70s-80s Japan which had committed to the Six Sigma quality and built a reputation for its products.

“I think India is on the verge of committing to extremely high quality output. And the robustness of the supply chain requires road, rail, power, water and enough land, to build the ecosystem. I think the government is thinking about this in an integrated way, and I hope, infrastructure build out is a big part of the thinking because that's critical,” she noted.

Nooyi added that India gets a “bad rap” in ease of doing business rankings, but said the issue is “bureaucratic” which cannot be changed overnight. She felt that digitisation of all processes will speed up ease of doing business.

India is on the verge of committing to extremely high quality output.

- Nooyi

Overall Nooyi was optimistic and said that India’s future was “bright and very, very exciting”.

“It is very important that India shows it's open for business, that it is welcoming of foreign direct investment (FDI), that it wants to participate in the global supply chain, and that it will do everything to make sure that the regulatory burden is limited and policies are consistent. If India does this the future is absolutely dazzling. Brilliant,” she ended.