It was a pleasure to share my thoughts on India infrastructure trends and placing it in context of changes in global manufacturing competitiveness landscape. The Q&A by the students were very stimulating. All the best to them!!! This was delivered as a guest lecture for the elective - Infrastructure Development & Financing @ SJMSoM, IIT Bombay. Thank you Trupti Mishra for inviting me.

1. INDIA INFRASTRUCTURE
PERSPECTIVE & TRENDS
Vaibhav Jha
@ SJMSoM, IIT Bombay
On 31st Jan, 2018

2. CONTENT
 India Infrastructure Push – A comparative Perspective
 India infrastructure initiatives
 Conclusion

3. “I guess this means we are
an emerging economy”
Source: Cartoonstock.com

4. INFRASTRUCTURE SPEND CORRELATES WITH
ECONOMIC GROWTH OF ECONOMIES
Every dollar spend on infrastructure add to $2 in GDP

5. SECTOR WISE CONTRIBUTION OF EXPORTS
India has highest %age of services as part of exports. This has its
disadvantages

6. TYPES OF INFRASTRUCTURE
Most of the investment being talked about in India are in Hard and Soft
Economic type

7. INDIA INFRA SPEND AS %AGE OF GDP
India infrastructure spend as a %age of GDP starting to resemble that of
China’s

8. INDIA IS EXPECTED TO IMPROVE MANUFACTURING
COMPETITIVENESS GOING FORWARD
That US will be #1 shows the future of manufacturing will be driven by
automation. Brazil & Russia will keep struggling due to political factors.

9. BUT INDIA HAS COMPETITION FROM OTHERS IN MITI-
V (MIGHTY FIVE)
 MITI-V (Mighty Five)
stands for Malaysia,
India, Thailand,
Indonesia and Vietnam
 MITI-V is expected to
benefit from the
decline in China’s
manufacturing
competitiveness
 However, India does
not seem to have
significant advantage
vis a vis other MITI V
countries other than
the huge domestic
market

10. HARD AND SOFT INFRASTRUCTURE ARE THE BASIS OF
MANUFACTURING COMPETITIVENESS
Most of the top ranked criteria for manufacturing competitiveness are soft
infrastructure related
* The numbers in boxes are the rank of
the importance of drivers
Source : Global CEO Survey (Deloitte Manufacturing Competitiveness Survey (2016)

11. INDIA NEEDS TO CATCH UP ON ALMOST ALL KEY
PARAMETERS FOR MANUFACTURING COMPETITIVENESS
India is trying to close the gap with China and hence the focus on physical
infrastructure, regulatory environment and energy policy
Source : Global CEO Survey (Deloitte Manufacturing Competitiveness Survey (2016)

12.  India Infrastructure Push – A comparative Perspective
 India infrastructure initiatives
 Conclusion

13. FDI FLOWS IN INFRASTRUCTURE IS INCREASING
Source: www.ibef.com

14. STRONG MOMENTUM IN EXPANSION OF ROADWAYS
Source: www.ibef.com

15. RAILWAY ACTIVITY IS ALSO LOOKING UP
Source: www.ibef.com

16. POWER GENERATION HAS GROWN AT A GOOD PACE
Source: www.ibef.com

17. OTHER GOVERNMENT INITIATIVES
Source: www.ibef.com

18. PORTS INFRASTRUCTURE
 India has coastline of 7500 KM
 12 major and 200 non major ports
 Due to various government initiatives,
operating profits up by 43 % in 2014-15
and another 17% in 2016-17
 Port traffic increased at a rate of 29.2%
CAGR between 2015-17
 Sagarmala project to improve
connectivity of ports and create a cost
effective multimodal logistics
infrastructure
Source: www.ibef.com

19. LOGISTICS COSTS IN INDIA ARE SUBOPTIMAL
 Logistics cost in India is 14% of the cost of goods compared to
global average of 6%
 Logistics cost in India (USD 7/KM) for road transport as compared to
USD 2.5 in China, USD 3 in SL and USD 2.5 in Bangladesh
 The proposed integrated transport and logistics framework is
expected to increase the average speed of freight transport from
current 20-25 KM/hour to 50-60 KM/hour
 Investment of Rs. 5L crore to create hub and spoke model
Source: www.ibef.com

20. INLAND WATERWAYS
 India has 14,500 KM of inland
navigable waterways
 However cargo movement
through this route is 0.1% of total
inland traffic
Source: www.ibef.com

21. LONG WAY TO GO IN EASING THE BUSINESS

22. TALENT IS IN ABUNDANCE BUT NOT COMPETITIVE

23.  India Infrastructure Push – A comparative Perspective
 India infrastructure initiatives
 Conclusion

24. BUT FUTURE IS TRICKY!!! ARE WE READY?
Future will belong to the Artificially Intelligent nations. India is barely
beyond the start line.

25. CLOSING THOUGHTS
 India needs to overcome historic scarcity of infrastructure spend by spending
more in order to improve the manufacturing competitiveness
 While hard infrastructure spends are in right direction soft social infrastructure
too needs to be hauled up
 The future of manufacturing will look for much higher skills and automation,
soft infrastructure focus is a must to overcome that

26. Thank you!!

27. REFERENCES
1. Deloitte Global Manufacturing Competitiveness Index (2016)
2. Infrastructure Report by IBEF
3. Personal research – primary and secondary