Sunanda K Datta-Ray: The unmaking of India

When we moved from Honolulu to Singapore, my son, then aged 13, told me the little island republic was self-sufficient only in eggs. Not long afterwards, he announced that even eggs were imported. Before I left Singapore, booming without making anything, my elderly Chinese neighbour had acquired a large red rooster that crowed raucously every dawn just under my bedroom window. When I mentioned it, he apologised in Singlish, "You so lucky! India have cow, hen, pig, fresh milk, eggs, meat. My grandchildren think all made in supermarket, so I get rooster, lah, to show!"

That's the human dilemma of economic success. But sound management means being able to buy the best worldwide, even in defence, and not being content with shoddy goods just because it's desi. A thrusting 'Make in India' campaign holds the danger of cutting India off from the world. The psychological fall-out of import substitution is even more crippling. I don't know how the 'Latin American structuralism' advocated by Raúl Prebisch, Hans Singer and others affected people, but the 'craze for phoren', Vidya Naipaul rightly mocked, was part of the price India paid for trying to save foreign exchange through enforced self-sufficiency.

It produced all manner of psychological quirks. When my son was even younger and we hadn't gone to Honolulu, I happened to tell a school friend of his that he was looking nice. The chubby nine-year-old son of a rich Kolkata trader thought I meant his clothes. "This is only Indian," he piped. "I have many foreign shirts!" The roaring black market throve on such complexes. Even "export rejects" were desperately demanded.

All this came back to me listening to Y C Deveshwar, ITC chairman, talking about the 'Make in India' campaign. ITC faced a major challenge in 1982 when the Forest (Conservation) Act prompted Andhra Pradesh to renege on a contract to supply wood. The company could have imported pulp from Brazil or Indonesia or set up pulping plants there, but both would have meant exporting jobs. So, it went in for tree farming instead.

Other companies might find that solution too expensive or lengthy. But I am not sure one should worry about jobs instead of productivity. That could lead to a situation like Gujarat where at one time job creation meant engaging peasants to build earthen dams that the next rains washed away. If Brazilian or Indonesian pulp reduced costs and increased profits, it might foster supplementary manufacturing and create more jobs. There's a patriotic ring about import substitution, but we all know of imports being banned not to facilitate the swadeshi industry but to enrich monopolists whose clout depends on handsome payments to the ruling party. The system was abused from the other end, too. I knew Lancashire mill owners who were trained in their youth to make coarse dhotis and saris that looked like khadi.

Even assuming everything works perfectly without cheating - which is impossible to imagine - 'Make in India' would be a wasteful exercise in bombastic nationalism. Governments can forbid foreign retail sellers; they can't prevent foreign goods flooding markets. Many stalls in Kolkata's Hogg Market have replaced books, magazines, tobacco and dried fruit with tawdry artifacts from Bangkok and Singapore. One reason why China's special economic zones boomed while ours languished was the hungry domestic market on the doorstep. Indian consumers weren't fussy about quality or packaging; they also saved manufacturers transport costs.

Globalisation means making optimum use of the factors of production. My mother's Wilkinson (hallowed English sword-makers) scissors were made in Finland; my Olivetti typewriter came from Spain. My breakfast eggs in Singapore were probably Indonesian. Peter Drucker, the American management guru of Austrian-Jewish lineage, touched on the human aspect when he wrote "Globalisation is not an economic event; it's a psychological phenomenon."

He cited a West African wood carver who made masks just like his ancestors but using Western technology's latest tools. He lived in a mud hut in his tribal village in a country that was officially 'underdeveloped' but had TV and a motorbike. He sold his carvings through art dealers in Paris and New York. "His aesthetics owe as much to the German Expressionists and to Picasso as they owe to his own West African ancestors," Drucker added.

That's the face of the future. In a country as large and diverse as India, it can be managed with adroitness so that children needn't imagine that milk, eggs and meat originate in supermarkets. A coercive 'Make in India' campaign could unmake India.