Can India be a base for significant growth in exports of manufactured products?
My personal view is that we have lost our ability to be the factory of the world, for a variety of reasons. The cost of manufacturing, power, fuel, infrastructure costs relating to logistics, getting the product to the marketplace, taxes on raw materials — all of those things put together create an environment where, in fact, manufacturing products are at a disadvantage on a global basis. So long as India was protected by high tariffs, Indian products appeared to be competitive. To give you an example, we are about to embark in Tata Steel on taking ferro chrome ore to South Africa, refine it and sell it to Japan because the power costs in South Africa are 50 cents a unit, and in India it is something like five times that. Similarly, if you look at fertilisers, it is the same. Input costs are out of sync with what they are in other countries. Take the automotive industry, where the cost of raw material may be 70 percent of the cost of your product. Or the electronic industry, where raw
