India’s growth potential does not quite reflect the strengths of the economy and needs more focus on localisation, enhancement of ease of doing business and greater spending on R&D innovation in the next Budget for an Atmanirbhar Bharat, says Nirmal Kumar Minda, Executive Chairman, Uno Minda Group, in an exclusive interview to ABP Live English after taking over as President of ASSOCHAM.
Q: In these very testing times for India, as ASSOCHAM President, how do you look at the domestic and global scenario?
Minda: The good times are that we have a young population and aspirations of 1.4 bn people. So the market is here, the demand is here. The GDP is 6.6 per cent now, but it should grow more. Our infrastructure development is good. Per capita income is increasing along with the GDP. In the auto sector, vehicle population is increasing and is at an all-time high. These are the good times, I would say.
On the flip side, we have the tariff war, the rare earth issue with China’s sway and the increasing gap between India’s imports to China and vice versa. These are not very good signs. The biggest challenge is imports. The gap in imports between India and China has grown 10 times. This is also not good.
We have to improve the quality of our MSMEs. Improvement in cost competitiveness, quality and technology innovation is critical to boost exports. Our labour manpower costs are lower, so we can get an advantage. Then the trade deficit can be balanced.
Q: Is the reform agenda of the Government on track to tide over these issues?
Minda: A lot of good things have happened. The GST rationalisation was a very good initiative by the Government. The reduction of income tax will increase money in the hands of the people,
The PLI scheme, FAME II scheme for the auto sector and now for the electronics, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). The Government is trying to support the industry and the ecosystem to a large extent to be self-independent.
Q: Are these efforts enough for the high economic growth India is looking at?
Minda: India’s growth is at 6.6 per cent. The question is of the potential given the kind of opportunity we have, the aspirations we have. I think we can do much better. Look at the infrastructure – where we were 10 years back and where we are now.
I would say that there is still much improvement left to be made in the urban and metropolitan areas. Look at the highways, the quality of the vehicle, the features and the comfort. Look at the houses. We have to work together – the government, public, and industry to find the scope to grow.
Q: What would you like in the upcoming 2026 Budget?
Minda:Furthering the ease of doing business with the simplification of the system and processes in all sectors. Boosting the purchasing power of the people through more tax incentives, more infrastructure development in urban and rural areas, and enhancing digital transformation and MSME growth.
Q: The investment cycle has not yet revived. What ails private spending?
Minda:One of the reasons is the ease of doing business. Look at the auto sector, though. There is a lot of capital being put in – Hyundai, JSW is investing.
Everybody should follow that. If the auto sector can do it, then why can’t others? What is stopping them? There are challenges in the auto sector, too. We are making our own efforts to find solutions, not just looking at the Government.
Q: What are your recommendations for further reforms?
Minda: We have to focus more on localisation, Atmanirbhar Bharat and on swadeshi. Start thinking about how we can start using things produced in India, as Prime Minister Narendra Modi has said. The ease of doing business still needs a lot of work.
As a country, we have to do a lot. The approvals at the different stages, the processes and systems have to be very simplified. Third, we have to spend more time and resources on R&D innovation, innovation, MSMEs.
We are telling the government that industry is also offering solutions to the Government. The Government is also very positive, and they are listening nowadays. They really want to improve and are asking us to give more feedback.
Q: How do you view the US-imposed tariff situation? Any fallout on the auto sector?
Minda: I think the Governments on both sides are positive about finding solutions. It is not so easy for tariffs to make a dent in the auto sector because the development cycle takes up to two years, from inception to validation. So they can’t stop it.
It is not like textiles that they stop buying from India. The gestation time is long. By that time, I am confident that things will be resolved not only for the sector but for India as a whole.
Q: What’s your outlook on the auto and components sector?
Minda: I would say we are far behind as an industry. China is producing 28 million cars. We are producing only 4 million, so almost seven times more than us. They are 40 per cent EVs – almost 10-11 million. We are hardly a few lakhs. So we are far behind.
However, we have a lot of opportunities as long as our infrastructure, per capita and GDP continue to grow. The common man’s slogan is Roti, kapda, makaan aur vahan. Our public transport system is improving, but not enough to keep up with the population growth. So there is a lot of room for personal vehicles and other mobility to grow. The market is going to be good.
The auto component sector is looking at double-digit growth in the range of 11-13 per cent in FY26. The industry is very promising with a focus on localisation, usage, import reduction and export increase. Exports have been growing 14-15 per cent CAGR annually, and we are cost-effective. People are investing in the auto component industry, and new players are coming in and building new capacities. Hence, there is a huge positive vibration in the auto sector, vehicles, as well as components.
Q: What is the way ahead on the rare earth issue facing the industry?
Minda:Yes, there is a barrier, and we have to look at where all the possible localisations are and where the dependence is so that we are not banking on one country. There are alternative sources, Chile, Australia and New Zealand.
Indian industry start-ups are also looking at recycling and how we can use the scrap. People are looking at alternatives like magnet-free motors in the auto industry to cut rare earth uses. So there are many innovations on the way. The Government has also given us Rs 7700 crore as a subsidy to promote the localisation of rare earth.
(Mukherjee is a contributing writer for ABP Live English. A business journalist for more than 15 years, she has written extensively on the economy, policy, and international relations in Indian newspapers and magazines)
