ET Awards: ‘Invest in the idea of India, by India, for India,’ say top CEOs amid West Asia conflict

As India grapples with the fallout of the West Asia conflict -in the shape of a weakening rupee and risk aversion among global funds toward emerging market assets - business leaders see the crisis as an opportunity to push through long-delayed structural reforms to cement the country's world-leading growth credentials.

At the ET Awards CEO roundtable, captains of India Inc said while a prolonged war beyond the next 30 days could deepen stress on the economy, policymakers and the industry must accelerate steps to boost energy security, particularly renewables, and reduce external vulnerabilities, recalling the country's track record to push through reforms during adversities.

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"This crisis must be taken as an opportunity and we must take it as a challenge," said Sajjan Jindal, chairman and managing director, JSW Group. "The war could be over in 30 days and then we will be back to normal but it must not be left unattended or taken for granted."

Jindal stressed the need for India to make itself "truly Atmanirbhar" by using "our own energy sources" such as solar, wind, coal and nuclear, while simultaneously cutting exposure to imported fossil fuels.

India, currently the world's fastest-expanding major economy, has enough experience and dry gun powder to handle the crisis even if it were to extend beyond 30 days, said Kotak Mahindra Bank founder, Uday Kotak.

"India has the playbook and it goes back to 1998 when Dr. Bimal Jalan was the central bank governor, and then of course in 2013, when India was one of the fragile five. So, the playbook is pretty clear," said Kotak, who was often described as the continent's richest banker when he held the executive leadership role at the lender that bears his name.

Kotak was referring to the Asian currency crisis in 1998, prompting Jalan to resort to extraordinary measures including interest rate hikes to curb the sharp drop in the rupee. In 2013, India suffered one of its worst market turmoil as it was clubbed with "Fragile Five" countries, a term coined by a Morgan Stanley analyst in 2013 to identify Turkey, India, Brazil, Indonesia and South Africa as vulnerable economies dependent on short-term foreign portfolio flows to fund their current account deficits (CAD). India managed to escape unscathed following steps to reduce the CAD, including gold import controls, and the Reserve Bank of India's efforts to ease the rupee's volatility.

The veteran banker said the central bank has already initiated the first step in the playbook by curbing excessively speculative foreign exchange positions. If the crisis deepens and oil prices rise to $120-130 a barrel for more than a month, the next part of the playbook would be interest rates, going by history, said Kotak.

For Anish Shah, Group CEO and MD of automobiles-to-software conglomerate, Mahindra Group, the conflict does not pose big challenges now and is mostly around the supply chain.

"If the war goes on for another 30 days and intensifies again, we will likely see a ripple effect from a supply chain standpoint," he said. "What worries us most is about helium impacting semiconductors. That will impact multiple industries, not just for India but across the world."

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Electric Vehicles

As part of the shift to the increased use of renewable energy, the business leaders called for fast-tracking a shift to electric vehicles.

"Almost 60% of all cars in China are electric cars. In India the number is 3%. And most projections tell me that even by 2030, India will be only 10%," said Kotak. "We have to really turbocharge that and the issue is raw materials availability. Between now and 2030, we will truly become more Atmanirbhar in a world where assets and control over assets is going to be a critical part of strategy."

Jindal said India must increase the use of electric cars, trucks and buses.

"We have to come out of our comfort zone because, you know, every petrol bunk has, we are used to it, go and fill the gas and move on," he said. "We have to move to this new way of life. The Indian industry has to wake up and we should have in this crisis an aggressive target that will be at least 25-30% of all new cars which will be electric cars."

Artificial Intelligence

Beyond the immediate rub off effects of the West Asia conflict, there is an urgent need for India to upskill its growing workforce as the rapid adoption of artificial intelligence is seen disrupting existing jobs and creating new ones, according to the business leaders.

"What's going to happen is that, just as a lot of manual labor got taken over in the third industrial revolution, this industrial revolution will also take out a lot of repetitive work," said Arundhati Bhattacharya, president and chief executive officer, Salesforce South Asia. "Its not only in the area of IT where we are evolving fast. We will need people even in other areas and we will begin to create newer kinds of jobs."

Echoing Bhattacharya, Mahindra Group's Shah said AI could create more jobs and this could be an opportunity for India because of the talent base.

Companies across industries, including automotive, real estate, hospitality and renewables, are already deploying AI to improve manufacturing efficiency and quality, enhance customer experience and optimise energy output, according to Shah.

In the face of the AI disruption, the skills for the country's workforce to stay relevant are evolving on a daily basis, said Bhattacharya.

"The skills are evolving at a rate where you feel you are on a Concorde or maybe a rocket," she said. "The worry that we have is how do we ensure that the workforce understands where we are going and how do they get there."

R&D Push

Stressing the need for India to step up R&D spending, Jindal said China has taken a deliberate policy call to compete with the United States through aggressive, state-backed investments in innovation, despite uncertain outcomes.

He cited the example of BYD, which received about $15 billion in support from the Shenzhen provincial government to take on Tesla, with the state later monetising its equity stake.

Jindal said while India has announced initiatives such as the ₹1 lakh crore Anusandhan fund, procedural hurdles make it difficult for companies to access funding for projects like battery cell manufacturing.