Business Mandate (Mar 2023)

Tayub Refai

Welcome to the MMA Annual Convention 2023!

Iam delighted to present to you the special issue of Business Mandate on the occasion of MMA Annual Convention.

India’s emergence is vital for the global economy to grow Without the demand generated in India, production would plateau down globally Every nation’s growth is constrained by the natural growth rate of its population. In other words, the world economy is not out of the woods yet Japan, Europe, New Zealand and even China have populations that are either aging or declining. The elderly populace consumes up to a third of calories much more than the younger folks. Add to this the declining ranks of youth in the workforce another constraint to economic growth. India is where the consumers and their cohorts are found, in numbers, affluence and distribution Therefore, it makes business sense to transfer production to high population markets. India is already becoming the most sought-

 The elderly populace consumes up to a third of calories much more than the younger folks. Add to this the declining ranks of youth in the workforce—another constraint to economic growth.

after destination for FDI. It is also one of the top five global economies.

Listen to thought leaders sharing their insights on the theme, “INDIA’S CENTURY: How to Drive Sustainable, Inclusive Growth?” at the convention and watch the live webcast.

Gp Capt R Vijayakumar (Retd), VSM

I congratulate Team MMA for putting together an exciting convention with a galaxy of outstanding speakers.

The incredible power of bot

A bot is an automated software program that digitally replicates some type of human activity.

The Bhashini Project, which uses open AI’s ChatGPT, is the government’s national language translation mission aimed at nurturing Indian language technologies as digital public good. Soon you will be able to ask questions and get details of more than 170 government schemes in your own language In future, Bhashini will be integrated with the National Digital Education Architecture to enable children and adults to learn languages. It will leverage conversational local language techniques to facilitate payments AI is a useful tool to overcome the language barrier in India The ChatGPT-powered Bhashini has the potential to provide millions of Indians with access to the Internet and other digital resources in their own language A great digital initiative indeed!

Contemporary trends in international taxation

The Finance Bill 2023 has proposed amendments to bringing overseas investments in unlisted and closely-held companies under the tax net. Concerns have been raised over the methodology of calculation and also about the compilation of FEMA regulation In this context, the International Fiscal Association (IFA) in collaboration with MMA is organizing an international conference on Contemporary Trends in International Taxation on 3rd March 2023 at MMA Management Centre. This conference will provide insights on international and national taxation issues of current interest Experts will also deliberate on contemporary tax trends having national and global

 The Finance Bill 2023 has proposed amendments to bringing overseas investments in unlisted and closely‐held companies under the tax net. Concerns have been raised over the methodology of calculation and also about the compilation of FEMA regulation.

impact. The event would also delve on ramifications arising from Budget 2023, including its impact on raising funds and cross-border structuring of startups from a tax and regulatory stand point. Block your diary and join us at the conference

The big lithium find

The discovery of 5.9 million tons of lithium in Jammu and Kashmir is a major boost for India’s electrification plans This is good news as we are still dependent on lithium imports for industrial use. Although there is much work to be done before its true value is confirmed, mining lithium is a high-risk, highreward game in the ecologically sensitive Himalayas

Investment lessons!

Post-Hindenburg, fundamental changes have kicked in; retail investors are struggling to gauge its impact What goes up fast can come down faster. Given the low free-float and liquidity, there weren’t enough buyers for Adani Group stocks when sentiments turned sour Short-selling is a very risky strategy because of huge volatility. Typically, the fundamentals of a company impact its market size Many influencers have projected

the Hindenburg Report as an economic attack on India

For individual investors, it is next to impossible to figure out how many more of such shocks will happen and what their exact impact will be on the price of stocks It is imperative to understand that there is nothing that can possibly be more important than prudence, insight and wisdom in making investments.

MMA Women Managers’ Convention 2023

Come March, our women members step up their efforts in interacting with women thought leaders, entrepreneurs and corporate executives at the Annual MMA Women Managers’ Convention The event is a celebration of the spirit of women, and the many diverse roles they play. We, at MMA, believe that the Women’s Day is not another shallow exercise in tokenism but a celebration of the spirit of women

Women have the power to create the future they want. But reaching their full potential requires a little more than status quo The big differentiator is not brains or brawn but resilience and most importantly an ability and willingness to go the extra mile!

The MMA Women Managers’ Convention will take place on Saturday, 18th March 2023 on the theme “The Extra Mile” at MMA Management Centre.

The convention committee headed by Dr Ranjini Manian and knowledge partner, EFL, are putting together a great convention with a galaxy of outstanding speakers. The convention content and structure have been finalized with great care, keeping in view the aspirations and expectations of our women delegates. Looking forward to seeing you in person at the convention on 18th March 2023 and you can also watch it live

Thank you for your support You are the adrenalin that pumps us to achieve greater heights.

Happy reading!

Decarbonisation: Now, it is ours to use or lose this dividend...

The physical manifestations of climate change are increasingly visible across the globe, and India is not untouched More than 75 percent of India ’ s districts – home to 638 million people, or 1 4 times the population of the European Union ﴾EU﴿ – are categorized as hotspots for extreme climate events already. India has acknowledged this threat in multiple forums, has set ambitious targets, and is taking bold measures to address the risks. A team of eminent panellists discuss McKinsey’s Report on “Decarbonising India”

Mr Naveen Unni

Senior Partner, McKinsey & Company and co‐author of the Report

In our report on ‘Decarbonising India,’ we took a lot of very deep sector views using the insights of experts from various fields. There are five core messages that we give as part of this.

1 Three quarters of India is yet to be built: This is a massive message of optimism India is in quite a unique position. Almost no other major geography or economy has the advantage that India has, because three quarters of India is yet

to be built. Even if you take a GDP growth rate anywhere between 4 to 5%, we’ll end up with an economy that is three to four times as large as now by 2050 India has a net zero target by 2070. We did in our analysis what it would take to do it by 2070 and also, if we do it sooner before 2070

That three quarters of India is to be built means that if we build more green economy now, we have the benefit of not having to retire assets. In most developed countries, the demand has flattened. If I switch from coal based power to renewable energy, then I have to retire my coal based power plant and this has an economic impact on the country In India, we don't need to do that. A coal plant has a life of 40 years. The average age of our coal plants is 12 to 15 years So, for another 25 years, we have to keep burning coal Because there is 3x more growth, we can start building all the additional growth in green.

2 Tailwinds in mobility and power: Power and mobility are the two largest sectors in terms of emissions. With a lot of good news, the likelihood of getting to decarbonisation in those sectors is quite large But there are a few other areas where we need a big push, like, in steel and cement. In the process of making steel and cement, carbon dioxide is released and it's very hard to replace that In steel, at least, there is a different technology that uses green hydrogen instead of the classic blast furnace process. But in the case of cement, there is no alternate technology as such Here, material circularity is an important dimension which we need to push.

3 Challenges of capacity growth and management: The economics are favourable in many instances. The technology is also there. The challenges are in adding renewable capacity into the grid, getting enough land and financing. We are an energy import dependent economy and it makes a lot of sense to go green There is a lot of energy security linked into energy transition and we have an opportunity to take advantage of.

4. More benefits: The benefits will exceed the downside, even without factoring the climate challenge

5. Need to act now: We are already going through digital transformation. The other big transformation now is sustainability The digital transformation is a services transformation There is some infrastructure and capital required, but it's a people intensive transformation Sustainability, on the other hand, is a capital intensive transformation The

 There is a lot of demand growth expected in each of these sectors. Our current emissions are about 3 Giga tons of carbon per year. If we do nothing, this will grow to 11.8 Giga tons per year by 2070. The good news is we're doing a lot.

amount of capital we need, by our estimate, is something between $7 and $10 trillion This means that 3x of current India's GDP has to be spent over the next 30 years to decarbonize. But if we don't invest that capital wisely, we’ll have problems later If we don't make it green in every investment we make from here on, there is a cost to pay.

The following five industries in India contribute to 72% of our emissions currently: power, iron and steel, cement, agriculture and automotive. If we can arrest the 72%, then we have gone a long way in getting to decarbonisation There is a lot of demand growth expected in each of these sectors Our current emissions are about 3 Giga tons of carbon per year. If we do nothing, this will grow to 11.8 Giga tons per year by 2070 The good news is we're doing a lot If we continue this and make the right set of actions, we won't get to net zero by 2070 but we'll get to 1.9. This, we call as a Line of Sight (LoS) scenario. Then we estimated an accelerated scenario where we put more efforts, introduce new technologies, invest more capital and shift agriculture methods. Here, we would get to 0.4 Giga tons and still we won't get to net zero In 20 to 30 years, human innovation will hopefully get this to zero It is not easy, but doable.

Decarbonisation themes

Some of the themes like adoption of renewable energy, faster penetration of electric vehicles, use of green hydrogen, carbon capture, utilization and storage are the wellunderstood ones. But material circularity and the whole idea of waste to wealth is a massive lever for decarbonisation Because waste to wealth means that we don't need to produce that much. Also, landfills generate a lot of methane, which has many times higher greenhouse gas warming effect than carbon dioxide

Sustainable farming: Agriculture is one of the largest contributors of carbon dioxide in India, thereby contributing to greenhouse gas warming. Sustainable agriculture is thus very important We need an additional 15% of India's landmass for solar panels, sustainable agriculture and for urbanization. One of the biggest challenges is land availability

In automotive, there are a few ideas worth putting on the table. Is there a subsidy potential for electric vehicles? Is there a localization that we can do? In the

tax we pay per litre of fuel, there is already an implicit carbon tax. In power, the biggest issue is not economics but it's all the supply side stuff. We need more infrastructure and we must strengthen our grids both distribution and transmission. To accelerate the power market and discom reforms, we need stronger distribution companies

India’s Panchamrit: Prime Minister Modi, in the previous COP, had spoken about Panchamrit (Five Point Agenda) as India’s gift. The number one was that renewable energy will go to 500 GW by 2030. We have not done more than 10 GW a year of renewable energy build. We now have to do 40 to 50 GW for the next eight years. We also need to focus on localized manufacturing capability Most of the photovoltaic cells we buy come from China, which has 80 to 90% of the global share

We must have indigenous capacity and capability to put up these plants ourselves. In the energy mix, coal continues to be a big part of the mix, even in our accelerated scenario We can have a battery car but a battery plane is a big challenge. So we need sustainable

aviation fuel We must incentivize people to invest and innovate and do research around sustainable aviation fuel. There are other fuel sources, like municipal solid waste, which can be converted to fuel. We must do the right targeting For example, there's a lot of sugar distillation We do ethanol distillation from sugar plants. Is ethanol the right fuel? Or is it sustainable aviation fuel, which is a much harder problem to solve? This is a real question and we must set the right incentives to get to the right solution.

We need a lot more new capacity in electrolysers and batteries in electric vehicles. We saw that the benefits of decarbonisation exceed the downside and challenges In electrolysers, solar panels and battery cells, we have an opportunity to leapfrog. In some sectors, we have a natural endowment. The sun is a natural endowment We can do something on green hydrogen and be the green hydrogen leader, which is hopefully what the green hydrogen mission will start to catalyse There are some spaces where India has an advantage if we invest right and now

Inflation: Are we, as a household, going to spend more or less in the future, in a decarbonized world? Housing costs will go up, because steel and cement will cost a little bit more, but fuel and mobility costs will go down. So on the whole, we're about the same. So from a household spend standpoint, going green in India is not a bad thing to do unlike in the West It's very important to keep that context in mind

5 action points

We have a 10 point agenda in our report but I want to list out five things that are important:

• National plan: We don't have a national plan and a roadmap to give us the markers, like how much green hydrogen we should be going for or

what do we do as an alternate for cement We need that at a macro level and sectoral level

• Compliance carbon markets: There are several market mechanisms and technologies that need to be accelerated for compliance carbon markets India is the largest issuer of carbon credits globally. But we've only scratched the surface and there's a lot more that we can do in this space and more so, for industries that are hard to evade like cement, aviation and steel

• Green bank: Because of the capital requirement that we have, we can create a Green Bank. A few countries are experimenting with this Some have created a Green Bank and a Transition Bank, which are built for green financing and transition financing.

• Land use policy & circularity: We must create certain policies or missions that are very much driven around the challenges like land use policy. We are short of 45 million hectares. India's total landmass is about 350 million hectares We have to find ways of incentivizing people to do the right thing with land. We need to plant crops for feeding people. We need renewable energy and we need to house all Everything is important and we must make the right choices. The circularity mission is very important We must focus on the hydrogen mission and also on carbon capture, utilization and storage mission. We've identified five potential industrial hubs where we can have carbon capture, utilization and storage

Accelerate renewables and an enhanced hydrogen mission. Our optimism comes from the demographic dividend and growth

opportunity that India has Now, it is ours to use or lose this dividend Whether we like it or not, the next decade will see how much of this we can get right and how much we can decarbonize

like Tamil Nadu which has 40% renewable in the mix, can lead the way We need visionary leadership at the grassroots level for fully harnessing the decarbonisation opportunity.

Ecosystem: We need to build the ecosystem Decarbonizing has to be part of a social transformation It has to start with the entire population of India. India needs quite a lot of water, if it aspirationally wants to be in the semiconductor business, data centre business and battery business.

Today, we are starved of water. We don't have clean water across India. We must first disrupt water in every urban city of India Water and energy have a close nexus If you want to pump water, you need electricity, for which we depend on coal. In 2023, we will be overtaking China in population and water becomes a very important per capita consumption story

Mr Ravichandran P President, Danfoss Industries Pvt Ltd

One of the key pillars of decarbonisation is energy efficiency On the demand side, there have been tremendous initiatives done by the Bureau of Energy Efficiency. One of the biggest examples is the use of LED bulbs, which has cut down the energy footprint in cities and houses Energy efficiency is less understood and it needs to be fully harvested. Today, India has got 500 GW of connected load I believe that 30% of this energy can still be harvested and we already have technologies for that.

Leadership: We need a leadership direction, not just at a national level, but at a state level too. When Denmark had the oil crisis in the 1970s, they decoupled GDP growth and energy intensity. That's how wind energy was born. Every state government must be made to think about a carbon neutral journey plan A state

Agriculture: There is a nexus between food, water and energy. In agriculture, we need to mandate what to grow, how much to grow and where to grow The biggest disease in India is diabetes and we still grow a lot of sugar which consumes a lot of fresh water. We need a policy regulation and a lot of education and directional shifts in agriculture

Digital: If we want to decarbonize anything, digital is the core of it, because we need to measure carbon consumption. India has a very strong position in digital and IT sectors We can use this as an opportunity to pivot and lead the world in what I call as the digital decarbonisation.

We can create digital twins of a building or a factory Using digital, we can go down to the smallest element where leakages happen and fix them using technology. As an ecosystem in India, we can create 3 to 5 million jobs, only on decarbonisation.

Digital Decarbonisation: An opportunity to pivot and lead the world

Human behavioural change & energy

three circles to get the best results

The data must be reliable and auditable Unfortunately, there is no global standard and template for data gathering.

Dr Arunkumar M Sampath

Principal Consultant, Tata Consultancy Services

Every country has its own growth path and it peaks differently for different countries We have to take independent decisions and strategies that work for us and we have to look at things from our perspective

The biggest impact on energy efficiency will come from human behavioural change rather than technology.

About a month ago, on the sidelines of COP27 in Sharm el Sheikh in Egypt, about seven companies came together GE, GM, Bechtel and a few others to work on cross industry, cross sector collaboration and open innovation What they said is that just because I did a fantastic engine or car, it doesn't mean that I am going to do a fantastic job; because if the roads are bad, you cannot drive beyond the second or third gear. So innovation in one sector can be leveraged by the others through collaboration

The next one is the triangulation of three things: one is open innovation; second, the energy intensive industries like cement, power and steel; and the third, carbon capture, utilization and storage If you draw a Venn diagram with three circles representing these three areas, we must operate at the intersection of the

During Covid, India took the lead of not only producing the vaccine but also giving it to over 150 countries literally free of charge, even though we had challenges in getting a license or patent. Similarly, we must have an agreement to help the poor countries to reach the emission standards by providing them with technology or footing their bills for developing/ acquiring technology.

Must use solar energy to capture carbon...

Dr Kanakasabapathy Subramaniam

Human body is an engine that burns carbon We exhale CO2 and inhale O2 This is exactly what an internal combustion engine does, and

this tells me that there is probably nothing wrong with carbon based fuel To me, it sounds like nature has honed in on carbon based fuels for all life forms. Converting carbon to carbon dioxide may be the most efficient way to use a fuel and convert it to energy There is nothing comparable to petrol or diesel even today. What nature does is it reverses carbon dioxide

Sr Vice President, Ashok Leyland Ltd.,

back to carbon We can call it carbon capture or sequestration To convert carbon dioxide back into carbon and oxygen, we have to give exactly the same amount of energy that we used to burn it in the first place Nature does that using solar energy and we call it photosynthesis, which is the process by which plants use sunlight, water, and carbon dioxide to create oxygen and energy The leaf inhales carbon dioxide and gives out oxygen and keeps the carbon to grow the plant. To me, the answer to decarbonisation lies in finding a way to extensively use solar energy to capture carbon A carbon based fuel has many advantages It gives the highest amount of energy density This is one part.

The second part lies in the concept of keeping things simple The automotive sector is one of the culprits for emissions By saying that petrol and diesel are the culprits, we may be using a brute force solution.

The process of making green hydrogen is expensive With battery vehicles, we are worried about the environmental cost of mining lithium, making batteries and disposing them at the end of life.

We know from Newton's law that F = ma (force equals mass x acceleration) You consume energy only when you accelerate. If acceleration is zero, there is no force and no energy consumption; provided the road is good and you don’t brake So the problem of fuel consumption is a problem of traffic management and it's not changing the fuel. This can be a right idea for a traffic management startup. Can you manage the traffic so nicely that you optimize the flow and don't brake? Then you will literally have a free ride without fuel. Even with electric vehicles, you will keep braking if the road is bad. Changing the fuel is the wrong way. The correct approach is go back to the fundamentals and getting close to ideal driving conditions. 

Naveen Unni: What is India's leadership in this space? How do we take the suggestions to action, over a 10 to 20 year period?

Mr. Ravichandran: When we build a future, it has to be a full ecosystem approach In the last four or five decades, we have not tried to solve the problem. We need a holis c approach to problem solving. We need to build India centric solu ons with deep value chain where we don't rely on imports and build open source technologies, which can be easily scaled The speed at which you can scale using

digital pla orms is more cost efficient For example, Amul is a company which is almost decarbonizing the dairy industry Amul was built using a circularity model embedded in everything they did. Amul is an ecosystem play. They can measure the temperature of the cow They are online and in digital The farmer gets money in digital The quality of milk measured is digital. The technologies and the solu ons have been done indigenously So if India wants to lead, we need an ecosystem approach

Dr Arunkumar M Sampath: Technology

can only take you so far The behavioural change is very important. Sustainability must have inclusive growth If you want technology or solu ons to succeed, there must be a community buy in.

Dr Subramaniam: You can learn technology on YouTube We have the brains

All we need is to realize that if we have the confidence, we can do it. We just need to bring the people together and focus the brains with the right degree of confidence

With our roads, it’s impossible to drive without frequent braking. How do we get over this problem? How do you see the adoption of hydrogen as a fuel?

Dr Subramaniam: With regenera ve braking, you can recover 20% of the energy. There's a lot of technology that's coming up with which you can recover up to 70 or 80%

Of course, it will take a li le longer. Hydrogen is a very nebulous sort of thing. To me, hydrogen is not a fuel because a fuel has to have inherent energy content There are many ways to make hydrogen but let's take spli ng water You have to put in energy from somewhere and get hydrogen Hydrogen can be a storage medium like a ba ery. It’s be er than a lithium ba ery. We can convert water into hydrogen and store that energy for later use

already in place Technology agnos c thought process must also be there

Coal is a major source of power in India and it is available in abundance. Why should India avoid it?

Mr. Naveen: We s ll are going to burn a lot of coal We need a lot of power and we don't have sufficient renewable energy It is going to be a coal driven economy, even in our accelerated scenario. By 2040, quarter of our energy is s ll coming from coal This is not to say that coal is bad or good There's no judgment here. All we're saying is decarbonisa on is good. Just as much as we have abundant coal, that coal is not the best quality The idea is to get a mix of energy so that we are more resilient, going forward. Coal con nues to be a part of the mix

In energy efficiency, we had the LED revolution. Why is it that the concept of energy efficient fans has not caught up in a big way in India?

Mr Ravichandran: Ini ally, the focus was on heavy industries that were guzzling up energy like steel, cement, mining and paper. In phase one, they came up with a PAT scheme Perform, Achieve and Trade, thanks to which, we have one of the world‐class cement plants in India and in terms of the energy that we consume to produce a ton of cement, we are the world leaders EESL is now providing energy solu ons for the government. Mul ple products have been looked at including fans, grinders, etc We also have the energy labelling program for appliances. There are great ini a ves

Do we look at nuclear power as an option, considering issues like safety?

Mr. Ravichandran: There are so many different technologies and nuclear is certainly not rolled out If we shut down coal plants, there will be a big NPA in the banks and joblessness in mining. We need to cra our choices carefully.

exactly where we need to lead the discussions India needs more funding Technology is not an issue. Our Prime Minister should use this as a great opportunity to reposi on India as a superpower in decarbonisa on.

Mr. Naveen: Indonesia was the previous host country of G20 Right at the end, they managed to get a $20 billion in funding through four years for decarbonisa on and sustainability. So there is a real opportunity to put something concrete, especially around technology transfer A lot of commitments have been made on capital transfer but they haven't materialized. So we can use this as an opportunity to canvass for the Global South, not just for India

What are the solutions we are looking at to minimise transmission losses?

Mr. Naveen: We need more copper and more transmission capacity The bigger issue than transmission losses right now is lack of transmission.

Mr. Ravichandran: We can also have more micro grids, especially in remote parts

Will G20 leadership give us leverage to gain leadership position on sustainability?

Mr Ravichandran: It is a great opportunity to posi on India A er the Paris Agreement and Glasgow, it is India that has actually met quite a lot of climate commitments. This is

Mr. Naveen: It's a good idea for remote places where the cost of ge ng a transmission line is so high But everywhere else where there's some reasonable density, micro grid is not the best op on.

Dr Subramanian: We also have HVDC transmission to reduce transmission losses

India spends $500 million as the daily spend in importing oil from outside. Broadly, the petroleum sector is divided into three streams: The upstream companies search for oil and gas within the country or outside the country, similar to any mining industry, but with a high level of uncertainty. Companies like ONGC, Oil India, Vedanta, Cairn and Reliance to some extent, are the leading companies in this business Based on some geological surveys, they look at areas where condition exists for oil and gas to accumulate. They follow a process of elimination and zero-in on likely areas The only way to find out whether oil or gas is available is by drilling a well. On an average, a well is drilled to three kilometres below the surface, where the pressure will be very high It costs roughly about $3 to $5 million to drill a well onshore, about $20 million to drill a well offshore and close to $100 million to drill a well in deep sea water. It's a highly capital intensive sector Therefore, you can understand why there are a limited number of players.

Mr P Elango, MD, Hindustan Oil Exploration Company Ltd , shares his insights on the issues plaguing the oil sector in a chat with Mr V Shankar, Vice President, MMA; Founder, CAMS; and Director, ACSYS Investments Pvt Ltd.,

The next part is downstream, which is processing the crude oil, that is discovered by the upstream companies or imported by the country from outside India, in a refinery This is like any other process industry. They feed the crude oil and get different types of petroleum products at different boiling points. All the refining companies have a marketing arm which sells the petroleum product through retail outlets India

 India has 250 Million Tons of refining capacity and we need only about 200 MT per year. So we're able to export 20% of what is being produced. To that extent, the value addition happens within the country.

has got about 80,000 retail outlets spread all over the country Then we also have midstream companies that transport the oil either through sea tankers or by pipelines within the country.

I began my journey in 1985 with ONGC. At that point in time, India was able to meet 85% of country's requirement and we were only importing 15% of oil In 2000, the domestic production could meet only 35%. In the last two decades, it has come down further and today, we are able to meet only 15% of the requirement and 85% of the oil is imported

Imagine we switch off all the lights in an auditorium during evening hours and throw around a box of pins all over If the task to find those pins and put it back in the box is given only to two people, the probability of finding it is lower. But if the task is to be performed by many people, then the probability of finding the pins is much larger Finding oil and gas is something similar to this or to tiger sighting. You need to have passion, patience and perseverance. The cost

of doing it is very high. The complexity is less in the downstream side. The leading players here are IOCL, BPCL and HPCL in the public sector and Reliance and Nayara in the private sector. The one good thing India did in the mid and downstream side was that it built capacity in excess of our requirement India has 250 Million Tons of refining capacity and we need only about 200 MT per year. So we're able to export 20% of what is being produced. To that extent, the value addition happens within the country

If the producers can form a cartel and set prices, why can’t the consumers form a cartel and dictate prices? What are the dynamics of this market?

Roughly, we have 193 countries recognized by UN as individual nations. Whether you find crude in all the countries or not, you will find a car. If you have a car, you obviously need petrol or diesel Of these 193 countries who are consumers, only 20 have exportable surplus crude oil. The mismatch starts from there.

That's number one Number two, crude oil pricing is also determined by basic economics, which is demand and supply. But there is a very important third factor, which is geopolitics that determines the oil prices.

The unit cost of producing oil has very little to do with the oil prices Unlike any other commodity, oil production can be controlled very quickly. If the producing cartel decides to reduce the production by X million barrels today, it can be done instantly In fact, this culture started 150 years back when oil was discovered in the US. They realized that if you produce more oil, the price goes down So, there was an artificial restriction on production, which resulted in increased prices.

The largest importers are China, India, US and Japan Even if they form a cartel, it cannot be really effective, simply because the producers can decide to cut down the production or even deny to sell. The equation rests with a strong bias towards the seller.

average use of gas is about 24% In India, it is just 6% because of the lack of infrastructure PM Modi, when he was the Chief Minister of Gujarat, focused on creating the pipeline infrastructure within the state. So, Gujarat has got about 3500 kilometer pipeline and 35% of Gujarat’s primary energy mix consists of gas For mobility, CNG (compressed natural gas) is used and piped natural gas can substitute LPG. In Tamil Nadu, right here in Ennore, IOC invested Rs 10,000 crores in setting up a LNG plant, where liquefied gas will be brought through tankers, regasified and put through pipelines Unfortunately, the utilization of that is less than 10% because of the politics in laying the downstream pipelines.

It’s a pretty sad statistic that Rs.10,000 crores of investment is not effectively utilised. In the pre-Covid era, where was India sourcing its oil and gas? What were the nature of our contracts?

Import of oil need to be through the sea route

Tell us about natural gas production and distribution. Can we substitute oil with gas?

Gas initially used to be a by-product of oil In terms of its energy content, it is quite similar to oil and can, therefore, substitute quite easily wherever oil is used

except

for the fact that it's not easy to store the gas

You need to condense it and convert it to liquid form to serve the gas. Otherwise, it will occupy a large space. In the early 70s, oil companies looked at gas as an unwanted thing But subsequently, countries developed the gas infrastructure, which is primarily the gas pipeline and they were able to make a very good use of gas

Just to give an example, in Russia, 50% of the primary energy consumption is from gas. Global

Therefore, sourcing from the shortest possible route is advantageous. From that aspect, Middle East is about 1050 nautical miles from Mumbai It is a short route and it became a major source of purchase for the Indian

 Sweet crude is always $5 or $6 at a premium to the sour crude. Refineries prefer buying the cheaper sour crude and then processing it to remove the sulphur content.

companies. The second reason to buy from the Middle East is the type of crude. There are two types of crude broadly: Sour crude, which has a slightly higher sulphur content and sweet crude, which has zero sulphur content.

Sweet crude is always $5 or $6 at a premium to the sour crude Refineries prefer buying the cheaper sour crude and then processing it to remove the sulphur content. 60 to 70% of our requirement comes from Middle East South African crude is about 15 to 20% The balance is from South America or Russia, which has now gone up.

Coming to the commercial terms, we have long term contract and spot market deals The price is determined by the market dynamics on a daily basis and we don't get a price advantage through a term contract. However, we can ensure security of supplies and the refineries need a certain volume constantly India buys about 70% through term contract and 30% from spot market. Typically, refineries in the private sector tend to be more aggressive and play in the spot market The country's sovereign relationship has some influence in all the arrangements we make. But otherwise, it's a commercially independent transaction between the buyer and the seller

more, India started importing crude from the US and I think it continues to import crude from the US even now. Was that a strategic decision or was it commercially sound?

It is a political decision. We do not lose anything because we are able to benchmark the price US is a very important player in the oil and gas market Oil was first discovered in the US and it also became a freely tradable commodity out of the system generated by the US To an extent, even if Saudi produces oil, the US has a role in fixing the price for that oil. The US is the largest producer and largest consumer of oil. It is also one of the significant exporters of oil One of the important and major developments of the century is the production of shale gas / shale oil in the US. In 2003, they came up with a technology called fracking to pressurise underground rocks with high pressure water and extract shale gas and oil from the rocks Though this technology existed for many years, it became commercialised only in this century. It dramatically changed US from a large importer to an exporter.

We read in the newspapers about ONGC and also private players taking a stake in some oilfields? How does this arrangement work? Has it worked well for India?

Oil requires a larger investment and more players. There are 3000 oil and gas companies in the US but in India, you can count the numbers with your one hand Our access to capital, during various periods of time, was limited. The exploitation that has been carried out so far is in a very limited manner If you do very intensive exploration, there is every possibility of finding more oil and gas within the country.

When Trump started putting pressure on India to import

The government has been trying to bring in private sector but they are not very comfortable with the prevailing Indian bureaucracy, particularly when things like retrospective tax or windfall tax happen. Investors

of large amount require stability and the government has not been able to guarantee that. One major incident will drive away the larger players Some of them came and tried but could not succeed

In Rajasthan, there is a field called Mangala. ONGC drilled some wells and could not find any oil in the field Cairn Energy was a small independent company listed in the US at that time Its market cap was 500 million dollars.

It believed that if there is oil and gas in Gujarat and Pakistan, then the oil should have migrated and captured somewhere in that region They drilled 13 wells and could not find the oil. But in the 14th well, they discovered 1 billion barrels of reserves, which is equivalent to $80 billion Today, that field produces 25% of the total onshore production in the country That’s the nature of this industry.

How

can we mitigate the country’s exploration problems?

The present government has been very focused in attracting foreign investors As the exploration projects have long gestation periods, not many foreign players are very keen to get into a new country and do that at this stage. The difference between working in the oil and gas sector in China and India is very simple In China, you can amend the contract. In India, you simply cannot amend the contract, even for a grammatically incorrect sentence The process is so cumbersome and court alone can come to the rescue

The government has very rightly increased the share of gas in the primary energy mix of India. There's a very strong push. Majority of the states have been awarded with the city gas distribution licenses Pipeline networks are being created with a target to move from 6% to 15%. In Delhi, all the public transport system runs

 The government has been trying to bring in private sector but they are not very comfortable with the prevailing Indian bureaucracy, particularly when things like retrospective tax or windfall tax happen.

 India has traditionally enjoyed a very good relationship with Russia, particularly in the energy space. Therefore, India is able to get the Russian crude at about 40% discount.

on gas This was a court mandated decision Energy pricing is one of the key complicated issues Investors always look at the price and they want market to determine prices, which is not fully happening. The government has got its own set of arguments as to why it cannot just free up

Tell us about India’s oil sourcing strategy in the last one year, after the Ukraine war started. Is this strategy sustainable?

I think the government has done extremely well. In the past, when US put a sanction on Iran, the government of India complied with that and stopped buying crude oil from Iran, which is one of the lead suppliers of oil and gas to India Then the US imposed sanctions against Venezuela Again, India complied with it and lost those sources of supply. This time, India

decided that we will go and buy the crude from wherever we want.

India has traditionally enjoyed a very good relationship with Russia, particularly in the energy space Therefore, India is able to get the Russian crude at about 40% discount. India, in a sense, is benefiting by that. What I foresee is for India to get into more of a long term contract with Russia, which would ensure we continue to get at a discounted rate on a long term basis. This strategy has really worked out well.

Can you quantify the benefits?

From December onwards, we're buying about 20% of total crude from Russia at 40% discount. This number can increase depending on the outcome of the

transportation arrangements Russia has not been our traditional supplier and it’s far from Mumbai So the freight cost is higher. Interestingly, the government is looking at Chennai port as one of the possible ports for importing Russian crude Because the distance from one of the ports in Russia to Chennai is comparatively lesser. Overall, I foresee a situation where this energy alliance between India and Russia will strengthen and it should benefit our country

In the midst of the green movement which is about moving away from hydrocarbon sources, how are we going to manage the transition?

In today's modern world, fuel is equal to food. We import oil, which is for today and tomorrow. One of the important things is that India must use its own resources to meet its requirement We have abundant coal resources. With our economic growth, our energy needs will continue to grow at an average of 5%. Therefore, I don't see a situation where India can really get out of coal

The advantage we have is because we need lots of new energy, we can explore new forms of energy. We need every form of energy to meet the requirement and reduce the overall cost and improve the accessibility India needs to pursue its goal of adding more and more energy sources.

company which started small and grew big The growth is very exciting because you see ups and downs, similar to your life.

Then an opportunity came to turn around HOEC a company which was about to be closed down with losses The largest shareholder in the company an Italian company wanted to exit India. For them, $200 million investment which they had made, was not a big deal I took up the challenge and my idea was to run the large capital intensive and technology intensive company like in an Uber model, in a lean way, outsourcing the services

When we started the journey in 2015, we were producing about 500 barrels oil equivalent per day. Today, the production in HOEC is about 10,000 barrels of oil equivalent We are just 100 people Out of this 10,000 barrels, our share would be about 4000 barrels and the balance is done by our partners. It's been a bumpy road but I am really satisfied with the journey.

A couple of lessons that you want to give to the people?

Tell us about your entrepreneurial journey from ONGC to HOEC (Hindustan Oil Exploration Company).

I began my career with ONGC. After spending about 10 years there, I left ONGC and joined Cairn Energy in 95 or so Cairn then was a company which was producing about 3000 barrels of oil And when I left, Cairn was producing about 220,000 barrels of oil per day. I was really fortunate enough to work for a

I want to share a lesson from an article that I read. When a cow falls into a ditch, what you need to do is to get the cow out of the ditch, find out why it got into the ditch and figure out ways to ensure it doesn't get into the ditch again. It’s a very simple and commonsensical thing However, it’s important that you don't do all the three things at the same time but you need to do them sequentially.

Reading this was a revealing moment for me because in our business, there's a lot of crisis that you need to handle on a daily basis When the crisis occurs, if you get into why it occurred, you're delaying the period for the cow to get out of the ditch. 

Mr. Murugappan: Tell us about the defining moments in your life and how they impacted you.

Mothers have a very important role in our lives. So was my mother. I was in class seven. I was good in extracurricular activities When I got the mark sheet, I was so scared to show it to my mother and hid it for a while. She was smart enough to find where I could hide things. She saw my marks and was furious. She said, “Look, this is not acceptable If you don't perform well at the end of the year, I will send you off to our village, where you can go and join your grandfather.” My paternal grandfather was a farmer. I used to go and spend summer holidays with him I knew how difficult it was to live in a village. Just about that time, around 1961 or 62, they got power supply in the village.

She also asked me, “When your sister can do so well in the school, why can’t you?” My sister, elder to me by a year, is now a medical doctor. I couldn't sleep that night. I was really scared of going to the village. I started studying my sister She was very studious and hard working I started competing with myself to do

MMA‐KAS organised a discussion on the book "Engineered In India” authored by Dr BVR Mohan Reddy, Founder Chairman & Board Member, CYIENT Mr. M.M. Murugappan, Chairman, Carborundum Universal Limited, led the conversation with the author

better and better. That became a very positive habit and led to a virtuous cycle that goes on and on. I was in pursuit of excellence in everything I did This attitude thereafter translated itself into my business too I started my career as a professional. I spent about nine years in Voltas, a Tata Group company. Then I jumped into a full-fledged entrepreneurial journey

 The key to it is that if you have a customer who has got a stake in the business, he becomes your anchor customer.

The second moment came after working for 18 years when I realised the environment was changing I turned 40 and the energy levels seemed to go down The family was very supportive and therefore, with a big leap of faith in myself, I took a jump and became an entrepreneur, ready to take the risks in my life The third, is meeting you and you made a lot of difference to my life, as my mentor, though younger to me. So please do not think your mentors need to be elder to you

the 1970s and the 80s, it was still a tremendous amount of license raj and it was not technology My wife Suchi (Sucharita) and I assessed the risks. I also had growing up children at that time. I built a little economic, social net to make sure that she would become economically safe I came and bought a property in Chennai and rented it out to TCS. I promised my wife that I would not touch the rental income

You chose to pursue an entrepreneurial dream at 40. Did you assess your risks at that time?

Yes, I did. I come from a middle-class family. My father was an honest police officer My mother was a homemaker There was not so much of money at home But I had the ambition and dream to become an entrepreneur. As soon as I graduated, I wanted to be the master of myself and do something to contribute to the world I understood that I had to wait for a while to create some amount of wealth for myself. Also, in

So, there was an element of a very typical South Indian conservatism, coupled with a high aspiration, courage and conviction. Is that why you chose to go public at an early stage of your business?

Maybe hindsight tells me that it was one of the wrong decisions We started with a very small capital 20 lakhs was my personal money. Two NRI friends gave me $10,000 each. (1 USD was Rs 25 then). I borrowed 97 lakhs from IDBI The project cost was just 1 22

crores in all Fairly quickly, by 1997 or 98, we thought it was important to raise capital. Somehow, I got the

impression that the lowest risk capital was the public issue As it was just after the Harshad Mehta scam, my financial advisor said that it could be the last chance for us to go public, in the next couple of years. In hindsight, I think I diluted myself a little early But that was a key driver model. We wanted to expand the business by raising money. Engineering was still not there So that was the trigger

I've seen the company grow over time. First, it started off with digitalization services. Soon it transformed itself towards value added services and more towards engineering services. Did you engineer these transformations? Or did it happen at the right time, at the right place?

It was a very conscious move for us to transform ourselves on a continuous basis. My lifelong dream is to build engineering products. I'm a mechanical engineer by training We also moved up the value chain to provide product engineering services, providing solutions to customers and design-led manufacturing to ensure that we get a competitive advantage

You chose to invite some key customers into the shareholding. Wasn’t that a conflict of interest?

The key to it is that if you have a customer who has got a stake in the business, he becomes your anchor customer United Technology Corporation or Pratt and Whitney had the maximum shareholding in the company at 15%. We had our own doubts if they would interfere with our work, look at the pricing structure and put pressure on the margins and pricing The second challenge was if this would block any of their competitors to come to us. We discussed ways and means by which we could address that But we were sure that once they became an investor in the company, they will certainly have a greater commitment to us. Hindsight tells us that it was an amazing decision. They continue to be a top customer We have an engagement

 My simple definition of trust is ‘under promise and over deliver.’ That is when you earn the trust of the people. We won the contract with Pratt and Whitney, precisely because of the trust part.

with 1000 people and generate $100 million revenue year after year Literally, this is like an annuity that comes to us We wrote the contracts in such a way that they cannot question our pricing and they agreed to it. We also ensured that their competitors come and work with us

After the deal, I spoke to Mr Louis, then Chairman of United Technology Corporation and profusely thanked him. He said that he had made money twice over “First, by getting you as an offshoring partner, I’ve saved two thirds of my money. Second, by investing in your company.” I was delighted by what he said.

I saw, as a board member, you created value in terms of capability of the company. There was also an underlying value system of trust. That is why, all the customers came to us without batting an eyelid.

Absolutely. My simple definition of trust is ‘under promise and over deliver.’ That is when you earn the trust of the people We won the contract with Pratt and Whitney, precisely because of the trust part It was an accidental meeting I had with a team of 16 Pratt and Whitney. After 90 minutes of conversation, their Executive Vice President asked me, “Mohan Can I come to your office tomorrow?” It was not on his calendar. At the end of the meeting, he invited me to come to

 The underlying phenomenon is fairly simple. We build institutions to last forever. Human beings don't last forever, founders will not. But they like to see businesses flourish even after their time. Therefore, there is a very clear succession plan that comes in.

Hartford Much later, I went back and asked him, “Louis What made you decide so quickly that I was the right partner for you?” He said, “Trust. When I came to your office, I saw all that happened. It was no different from what you told me your emphasis in process, your ability to deliver quality and on time and the way in which you control your costs. All that mirrored every document I saw in your office.”

You chose to give people from across the world responsibilities, which spanned India as well. What caused you to do this?

I believe that locals know the culture, the value system and the ethos in that part and they are much better in conversing and convincing and giving the comfort to a customer, compared to a foreign individual who goes from here For example, Indians would not understand how the American football game is played. Right from the very early days, we decided

to have locals work with us in making sure that we can scale our business much more comfortably.

Building capability was a big part of Cyient. You also felt that Cyient was at a stage where you needed to slowly step back and do things that you enjoy in society. We already had the Cyient Foundation. You look at something much larger.

The underlying phenomenon is fairly simple We build institutions to last forever. Human beings don't last forever, founders will not. But they like to see businesses flourish even after their time Therefore, there is a very clear succession plan that comes in When I turned 60, I decided to put a succession plan in place to make sure the company will flourish forever. If the company gets into trouble, it is not just the wealth of the founders that is lost, but 16,000 jobs are at risk. I'm putting families at risk. They trusted me, believed in me, came and joined me and they built this company When I was 32 years old, fully in control of my previous company called OMC computers, a Tata

Sons director asked me if I ever thought what would happen if a bus came and stopped over me I had two young children and I was only worried about them But when the same question was asked ten years later, I started this company and it started growing. Now I was thinking about all my people in Cyient

 The future looks very promising. I'm an optimist like many other entrepreneurs. The environment today is so conducive for the growth of this nation. The ease of doing business has improved.

There is a poem by Linda Ellis It’s called ‘Dash ’ Once we disappear in this world, every one of us will rest in a six by four space. The tombstone has a name, date of birth, dash and date of death. If you look at the constituents of that board, nothing is under your control, except the ‘Dash’. Dash is the one that you contribute to this world. So we must think about what we can leave behind as our legacy

In the new phase of your life, you spend more time in public service, educational institutions, mentoring startups and so on. Is the joy that you get now greater than what you got when you started the business?

Both of them give me joy I can't put one to be superior and the other as inferior It's an amazing feeling that you get at the end of it. Business gave a joy to us in making sure that we created wealth, not just for ourselves but for several other associates in the company and investors We also participate in nation building. In 1991, when I started this company, India was precisely in the same situation that Sri Lanka is in today, unable to pay the foreign debt Today, India has about $550 billion of foreign exchange. Software companies contributed in big way. We also contributed in a small way The joy that comes from doing work outside the business is also enormous

What do you think the future holds for India?

The future looks very promising. I'm an optimist like many other entrepreneurs The environment today is so conducive for the growth of this nation. The ease of doing business has improved. The innovation index has improved I believe that technology, AI especially, will drive this decade ChatGPT will become as popular as what it is. It's very concerning to many. But we will see ChatGPT will get integrated in every industrial applications- agriculture, logistics, transportation and healthcare The opportunities are aplenty for the young people through technology and a conducive environment. In addition to that, we have the demographic dividend 

Istarted working in 1996 I have spent close to two and a half decades now. I am very privileged to get a chance to work with consumers across markets and across various channels I started my career in traditional trade or the Kirana, as it is called. I was also fortunate that someone gave me the responsibility of setting up organized trade for Hindustan Lever For the past eight years, I am part of Amazon, the e-commerce company and I am also on the board of a few companies like ‘More’. It's a practitioner’s outlook into how this market will evolve and the role e-commerce will play

It's important to go back to the basics. How do we fulfill consumer demand in a sustainable manner and continue to delight the customer? That's what business is all about India, as a country, has never been short of aspirations. There are thousands of influencers who take consumer needs, wrap them in a very compelling story and share it With rising incomes and penetration of technology, a huge demand is being created.

Mr Manish Tiwary, Country Manager, Amazon India, on what drives the company to provide uniform access to every customer, seller, and product owner And how technology is making entrepreneurship completely secular.

In my first job as a trainee, as part of a group, I was asked to launch a new brand of shampoo and that was big news. 99% of households in India used to have one shampoo The same shampoo was used by dad, mom and children That was the era back then At max, you could walk into a store and probably get ten brands if you were lucky. We were so excited five years later when conditioner started coming into the country Fast forward 25 years. Open your Amazon app and type on the search bar ‘shampoos,’ you will have close to 1100 brands in 48,000 SKUs Very importantly, we get consumers to select easily

Filters and refinement

When you log on to the app, you will see something called filters and refinement which help you shop How are these filters decided? If all of you decided to buy an air conditioner and you search for air conditioner with remote and when x number of people search, we realize that people are looking for a specific air conditioner with a remote. So we put a filter called

‘Remote.’ Next time when you search for an air conditioner, it's easier You click on ‘remote’ and it will shortlist the choice

You might have experienced ingredient free shampoos sulphate free, phosphate free, etc. We have 26 filters for ingredient free shampoos on Amazon It is a real life shopping app created backwards That gives you a clearer idea of how aspirations and consumption habits are changing in this country. All this obviously leads to a number If you google, there are enough predictions which say that from 800 billion dollars, we will probably hit $2 trillion in the next 10 years in terms of consumption

Supply‐side stakeholders

While the demand is moving forward, you also need a supply side There are two important stakeholders in the supply side brand owners and manufacturers How do you reach them? Rewind ten years back. Distribution was a big barrier. You had to physically go and distribute to lakhs and lakhs of stores To get

people to know about your brand, you had to advertise The smallest unit of advertising would be a local language channel. Even that would be really expensive.

People had good ideas but they could not get it into the market Therefore if you wanted a sulphate-free shampoo, where would you go? Every city has its own place where you can buy some of these imported goods like Palika Bazar in Delhi. Half the time, you came across expired stocks, so you would not get the good experience

Second, how would you reach the brand? Traditionally, we have 13 million stores which do CPG/ FMCG We have an awesome set of retailers who can do the best CRM without having technology They know every consumer. They can give great service but have limited assortment. It was a challenge for them to organize fresh stocks Then modern trade moved in Organized trade in India has seen a success but in limited pockets. Given the context in this country, it would be challenging for organised trade to expand

beyond a point because three costs are critical in organized trade people, land and utilities There is a common perception that India is a very cheap market. People costs are not very high but utilities and land are probably as expensive as the most expensive real estate, including things like electricity. Even in the retail trade, you will see most of them are coming up in state where utility bills are low like Andhra and Telangana So the financial model, if you are going to sell with the MRP, is not very robust in India. Add to that the lack of availability of clean real estate. Bulk of the real estate in India is heavily litigated It's done wonderfully But it has a limited role

Where e‐commerce scores

That's where, e-commerce comes in It's a little bit like mobility Today everyone has mobile phones People were looking for things and there were aspirations. E-commerce gives visibility; of course, both from the brand side and market side, there were some challenges. People get used to technology very fast in this country. When relatives come back from the US, no one can believe that they can walk out without their wallet in India They get completely zapped We have 280 million digital transactions every day in India. We have more people using the Internet than the population of the entire Europe Now put all of these together a consumer base, the middle class earnings going up and aspirational people wanting to try more products, the retail environment in the country between the small kirana store and organized trade and the penetration of technology. That is where Amazon comes in.

Journey from selling books

We entered this country nine-and-a-half years back to be precise. We celebrate our first 10 years in July.

We started as small warehouse in Mumbai with 100 sellers and we used to sell books At the start, the ecosystem was quite underdeveloped. The digital sophistication wasn't there and people needed a catalogue Many sellers never moved from a kirana to organized e-commerce. They just moved from kirana store to commerce.

We took it as an article of faith that the customers in India, just like anywhere in the world, would love selection, good prices and convenience. Therefore, we started investing well ahead of what we thought was the customer demand Our approach was quite clear It was to use technology to enable all kinds of sellers to get access to the consumer base across the country and use technology to cut down costs in the value chain, so that we could provide the best prices to the consumer

At the start, we realized that even as a company, there were lots of areas which we never knew how to handle For example, cash on delivery was a unique India phenomena Ten years ago, there were some companies doing e-commerce like Flipkart and rediff.com. But they were largely restricted to a few

 People get used to technology very fast in this country. When relatives come back from the US, no one can believe that they can walk out without their wallet in India. They get completely zapped.

 We free the salesperson from the paper. We get the idea sharp and are focused on data.

categories and urban centers. We wanted to use technology to remove the privilege of just the urban population who had access to all these, in a sustainable manner We always start with the customer first

Keep it short & simple

If you want to be a seller on Amazon, you're supposed to write one page, which is called the press release. It is focused on the customer need that you are addressing, how you will leverage technology to address it in a sustainable manner and the customer delight which differentiates you from current offerings If you get the consumer model right, the financial model is easier. A lot of companies get the financial model right but the consumer model is not right and therefore the offering fails.

Our model is very unique. In the beginning, a flywheel is difficult to move. But once it starts moving, it takes its own momentum Our strategy is to get more selection from sellers and get them to offer better value and better convenience. We get more selection, more

consumers and we deliver it faster The flywheel keeps on moving. It's a very unique philosophy in the management world. And in its own small way, it has served the company well over the last 26 to 27 years globally, and now in India.

Amazing things in Amazon

There are a lot of peculiar things we do when we want to achieve this We don't do presentations The annual strategic review happens in six pages. Even the font is decided Calibri 11. We free the salesperson from the paper We get the idea sharp and are focused on data.

In most companies, if you went for a meeting and the big person said, 'I like the idea,' everyone says, “We like the idea ” In Amazon, it's called social cohesion and is banned. Whenever we measure a P&L, we just don't look at the transactional P&L. We have instrumentation to measure the downstream impact of a customer When people shop on Amazon, we know, using data, if they get the shipment in six hours and

what is the likely chance of how much more would they shop That's what machine learning does for us It's a very fine-tuned science.

From one warehouse & 100 sellers

When we started, we had one warehouse Today, we occupy 43 million cubic feet of space. Wherever you are, whether it's Ladakh, Andaman, Majuli islands, Assam or Lakshadweep, we deliver to every pin code in this country If you are sitting in Chennai or Bangalore, the chances are that 30% of your deliveries will happen within two days. We've created a massive infrastructure of warehousing and transportation to enable this

When we started with 100 sellers, we went to the shops and mundis and begged people to start selling online Today, if any of you want to sell, it takes exactly six minutes to become a seller That's it Anyone who has a good idea can come online and sell nationally. You just have to focus on your product and your design and leave distribution and advertising to us Every time a consumer clicks, you pay. Otherwise, you don't even have to pay for advertising. More than 11 lakh sellers work on amazon in and that includes all kinds of people from startups to current unicorns to women entrepreneurs. We keep on adding close to three lakh sellers every year.

The flywheel gains momentum

Anyone with a good product should be able to sell anywhere. We have 100 million plus customers. We feel good about the kind of traction we are getting We have Amazon Prime, which is, in my opinion, India's largest loyalty program. Our thought process is very simple. The prime offering is so good that it would almost be irrepressible for you to say no We offer reading content on Kindle, music on Amazon Music,

 We want to ensure that we digitize close to 2 million small businesses by 2025. We're almost halfway there. We're also really big on exports because every seller who joins us can export to 188 countries.

video content on Prime Video, shopping on Amazon.in, games and many more to come The flywheel keeps on moving faster We sell over 20 crore products We love selection in that sense.

We want to ensure that we digitize close to 2 million small businesses by 2025 We're almost halfway there We're also really big on exports because every seller who joins us can export to 188 countries. They have to do nothing. We take care of all the complexity, the shipping and the paper work

We plan to export $20 billion of goods by 2025 In a year, we are now crossing 3 to 4 billion already. We are a pretty large employer in India. 1.30 lakh people work for us We could hit 20 lakh sellers by 2025 In this journey of 9 5 years, we believe that our initial thought that customers would love selection, pricing and convenience seems to be playing well. Most of the unicorns in India in the CPG and technology space were born on Amazon

It’s still day one

Within the company, we keep saying it's still day one for us What is day two? When a company becomes large and bureaucratic, when you have eight layers between you and the person who runs the company,

that is day two and it is a sign that the company is in chaos That's a reality, because a lot of large corporations don't exist after 40 to 50 years. Similarly, for e-commerce, I believe it is still day one. It's still a very small percentage of the market, though people talk a lot about it.

We want to drive that every customer in India should have the same access and that every seller, every

product owner who has a good idea, should get the same chance as a large industrial house, in order to succeed. This is what technology is doing to India. It is making entrepreneurship completely secular. Anyone can succeed at any age, and become an entrepreneur And that's where technologies like E-commerce, digitization, the cloud and artificial intelligence are helping us 

What is the penetration of E-commerce in rural India? Will E-commerce expansion be at the cost of the kirana stores? Can we sustain the growth of Ecommerce that was achieved during the pandemic?

It is probably 2% penetra on People choose different channels to shop depending on what they need. There are very few people who will say, ‘I'll only shop online or I'll only shop offline ’ During pandemic, there were lockdowns and restric ons but the government allowed e‐commerce to operate A lot of people started becoming sellers online. We have close to 2.5 lakh small stores which sell online This accelerated during the pandemic For a small retailer, working capital is very important. During the pandemic, we reimbursed their money every day, so that the cycle was faster

Most of our sellers operate online and offline. The ability of the Indian entrepreneur to adopt technology is mind

boggling. If we con nue to delight our customers and sellers, we would go con nue to grow

The expectation of large discounts from customers on e-commerce is growing. How do you manage this?

If the seller finds it efficient to sell online, he or she will offer you a be er discount. Our job as a marketplace is to create the infrastructure and having the ability to serve every pin code and to put together physical warehouses, trucking companies, etc so that the sellers can reach any customer they want quickly and make the marketplace experience seamless. We keep on ge ng more sellers and they keep offering be er prices The use of technology has removed unnecessary costs from the supply chain for our sellers. In the influencer marketing trend, the

review plays a vital role in creating customer perception. How do you handle this?

The good thing about social media is that you can always find the right person. It's not that you have to go to a film star to start with Nowadays, youngsters have started doing reviews. They can become popular, depending on the quality of their content The ability of an influencer to be awesome depends on how truthful and neutral his or her review is.

What is your take on ONDC (Open Network Digital Commerce)?

The team which is doing ONDC is also the team which created UPI, the na onal payment interface. We work quite closely with ONDC The thought is awesome It's about crea ng a pipeline where any seller can come in. Consumers can choose which seller they want, who will be the payment

provider or the logis cs provider and so on This is how UPI works in some ways It's early days yet. We are partnering to make sure that we can execute it

When someone starts selling, which is better—online or offline presence? How can people be protected against online e-commerce scams?

If you're star ng new and small, I would always encourage you to go the digital way It's far more cost effec ve It lets you focus on what you're good at. Offline is very challenging We leverage technology to weed out false reviews and scams We are pre y good in machine learning and AI. We can never say we've got rid of scams but we keep on ge ng be er The key thing is to protect the customer and the seller, who are our main cons tuents.

What about Amazon getting into offline model, like Reliance does? How do you balance your large supply chain?

Online model itself is so nascent right now So I wouldn't worry about offline. Of course, Amazon is experimen ng in North America and in other parts We should not get obsessed with the physical market. We should be obsess with the consumer. Every me ask yourself, what can you offer be er: Offline or online mode? Amazon warehouses have millions of products. We insource our technology and it is a strength area for Amazon How we manage to handle the supply chain of 20 crore

 The customer always comes first, the seller comes second and then the employee. That is our philosophy and I'm saying it in a very serious note. We don’t have fancy offices. They are bare bones.

products and s ll get them to you with probably 99 8% efficiency is almost a trade secret. Our backbone is technology and nothing else How will 5G impact e-commerce?

Any technology upgrade is good for us. Faster speed of data is cri cal for our business and so 5G will be good for us

I think we have the best of both worlds I have spent 25 years in India and I get technology from North America. We have spent a lot of me understanding consumers Our ability to read signals on what is good or bad is much faster in online than offline. A lot of people tend to think of Amazon as an American company, which legally it is, but it's exactly like Hindustan Lever We appoint people who work here and who have a great amount of exper se and knowledge

With the purchasing power of consumers increasing in India, who do you think will be the mainstay of Amazon’s revenues Indian market or global markets?

In Amazon, which is important —customer or employee?

The customer always comes first, the seller comes second and then the employee That is our philosophy and I'm saying it in a very serious note We don’t have fancy offices They are bare bones Everyone in the company, including the owner, has to fly economy, even if it's a 20 hour flight, because we believe every rupee or dollar we save, we can put it back so that it helps a customer. The seller comes second. If a seller does something which impacts a customer, we will always protect the customer first Obviously, we need great quality of employees. If we've not taken care of our employees, we can’t take care of our customers

What's your word of advice to entrepreneurs waiting on the fence to launch startups? We see that only a few succeed.

If I am younger, I would want to do something on my own It depends on what stage of lifecycle you are in. If you have a good idea and if you're focused on the customer, give it a shot Some would succeed and some wouldn't You have to be innova ve to succeed.

In creating a work culture, how do you ensure that it is embraced at all levels of the organization, especially since you have a global model?

People think of us as a technology company. The strongest thing in Amazon is people prac ces Let me give you an example The first day I joined the

company, I came in early and the door was locked There was a guard walking outside who said that if I wanted him to open the door, I must raise a TT. It means a Trouble Ticket It is a digital company You don't have secretaries who look at your mail Your room size is iden cal. You don't have a permanent sea ng space. It is genuinely mobile The culture is extremely strong and there is no hierarchy We keep on saying, work hard, play hard and make history. Amazonians want to do something which can create a difference in this world People think we are an e‐commerce company. But then, we are an entertainment company, a cloud company There is no be er place for people to innovate than Amazon. By and large, who do you think transact fairly in e-commerce Indian customers or international customers?

I don't know what it means by fair. Our philosophy is that 99% of customers are always right We don't put systems in place which penalize a good customer because we have a bad customer. That Indian

customers return more in online than interna onal customers is a myth Consumers in India behave exactly the way consumers behave elsewhere. They love the ability to return anything in seven days, if required

Does not digitization lead to loss of employment?

I completely disagree. What has changed the most in India? The sheer number of people working for technology May be 30‐40 years back, the thought of employment was a government job. Right now and I'm not talking about Amazon‐ ‐think of Swiggy, Zomato or Flipkart‐‐I can say it with confidence that anyone who's passed class 12 and has a driving license in this country, can get a job worth 30,000 rupees

A er Sea le, we have the best brains in ar ficial intelligence and machine learning, working in India We have Amazon's second largest office in the world Technology, in my opinion, is what will take India far beyond the 5 trillion mark. 

 The culture is extremely strong and there is no hierarchy. We keep on saying, work hard, play hard and make history. Amazonians want to do something which can create a difference in this world.

Ramaprasad: People play two kinds of games. One is the finite game where players and rules are well defined The basic objective of the game is to win When you win, the game ends there. People who play the finite game like soccer or cricket know exactly who their opponents are and who their players are; they play to win That is what the author calls as a finite mindset. Infinite game is a game played without any boundaries and rules. You don't know who your opponents are The game is played not for winning but to perpetuate the game. People continue to play the game till they get out

of the game The game continues

The author Simon Sinek takes us through several examples, starting from the Vietnam War. The Americans lost the war despite winning lots of battles. He says that the Americans played with the finite mindset of winning whereas Vietnamese fought for their

Under the “Read & Grow” series, MMA organised a discussion on the theme of the book ‘The Infinite Game’ authored by Simon Sinek Mr Sreenivasan Ramaprasad, Director, CADD Centre Training Services led the conversation with Ms Viji Hari, Founder, CecureUs and Mr Babu KS, Head ‐ Global Regulatory Affairs, Pfizer Healthcare India Pvt Ltd

lives, which is an infinite game One of his favorite examples is Microsoft and Apple. Microsoft started with a very good vision of enabling people to work better with devices Over a period of time, that shifted to a number game. When the former CEO, Steve Ballmer, took over the company, he drove the company for winning ‘When a finite mindset leader plays an infinite game, it's not good for the company,’ he says. At the same time, Apple was very clear about their vision They were not fighting with the competition; rather, they were working for betterment of the community.

Simon Sinek talks about five levers of infinite mindset, which are:

• Just cause: Advance the just cause. It differentiates an organization. The cause must belong to the future, be useful for the community and be for

the betterment of the world; it must be one for which people will be willing to make personal sacrifices That's the kind of just cause you need to have

• Building trust and trusting teams.

• Competitors: They are very much essential because if you have worthy competitors, you can learn from them and improve yourself.

• Existential flexibility: For a company to

survive, be flexible enough to exist. Victorinox, the Swiss knife company, was holding 95% of the market share in the Swiss knife till 9/11. After 9/11, Swiss knife was banned and the market share dropped to almost nothing They diversified into other products and grew the business.

• Demonstrate the courage to lead.

Viji Hari: You have to create a vision for the long term and not do something just for the short term. There are many lessons for investors, politicians, leaders, CEOs, managers and supervisors My organization works with a just cause of creating secure and harmonious workplaces. I deal with handling sexual harassment cases. I get fulfillment every time I go and handle a case of sexual harassment; I

 Courageous leadership is the lever that appeals to me. I think the organization is always driven by leaders.

~ Mr Babu KS

work for the cause of diversity and inclusion and create happy workplaces

Simon Sinek talks of an example in the chapter on trusting teams, where he quotes that he once visited Four Seasons Hotel in Las Vegas and there in a coffee shop, he met an employee called Noah. He ordered a coffee and started having a conversation with Noah. He asked Noah, “How do you like this job?" Noah answered, “I love this job The managers here just drop in, visit us and they keep asking us, ‘Hey, is there anything that I can do to help you to make you better over here?’” Noah also says that he works for another company in the night shift, just for his paycheck. We know how our very own Mumbai Taj hotel staff were willing to give their lives to protect the guests in the hotel when the bomb blast happened.

Babu: The purpose of our actions has to be much bigger. I come from Pfizer, the pharma industry We have registered our products across the world. Our vision is to provide breakthrough medicines to treat patients that change their lives In Chennai, we have a big setup During the 2015 Chennai floods, we were all struck in our Chennai homes. We had some critical regulatory submissions to be made in some of the geographies in the world If we didn't do the submissions, the approvals and the launch of the products would get delayed in the market and patients were going to suffer. We never asked our colleagues to go to office but some of them went to office, in the floods, on their own risk and made sure that the submissions were made, of course, in digital Simon also has another book, “‘Start with

Why ’ The ‘why’ is very important He compares parents who push their children to get first rank with parents who make sure that their children become lifelong students. I was a topper in my district from Andhra when I went to BITS but there I realised that I was one among several toppers. The ranks and the positions, the turnover, the top line, bottom line and profit are all very relative terms They don't make any sense in a way. Your actions have to be driven by the love for what you do. Why I get up every day and do what I want to do is very important

Ramaprasad: Existential flexibility is one thing which resonates with me. When CAD center started 35 years ago, our original intention was to provide CAD services We realized that we were probably 10 years early to the market. One month down the line, our revenue was a big issue and we didn't know how to continue the business. That's when we decided to start training in CAD as it had a bigger demand at the time We quickly put together a training program and started offering it There was no turning back after that.

Babu: Courageous leadership is the lever that appeals to me I think the organization is always driven by leaders The quality of the leadership and the courage they display is very important, especially when things become very competitive and it becomes very tough to stay in the game Sometimes leaders may have temptations to take shortcuts. The courage to stick to the cause and the clear direction from the leaders at the top are vital to the organisation

In Chennai, iD idly/dosa batter is very popular P C Mustafa, the founder shared his story at the Harvard Kennedy School. When they started, they really struggled; making money for survival became a big question They also had a product called ‘diamond cuts’ which is a tasty snack. They got a huge order from one of the star hotels for 1000 kgs of diamond cuts and they were very excited, as it would change the future of the company. When he discussed further with the hotel about where they wanted to use the diamond cuts, they said they were going to use it as a snack in their bar Mustafa was very clear. They didn’t want to promote drinking. He declined the offer. With iD batter, they were committed to help household cooking and wanted to give a pleasant experience for cooking to homemakers. He did not deviate from his vision

Ramaprasad: We also had this temptation of selling PCs which were booming during the late 80s and early 90s. But our promoters clearly said that we must stay focused on CAD which would give us the longevity

Viji Hari: Simon Sinek talks about CVS Pharma whose CEO took a decision not to sell cigarettes, because Pharma is something that promotes health and cigarettes would go against that cause. Everyone advised him against it because the shareholders were worried about profits. In the next three years, the profit share increased and their investors made a lot more money In the place of cigarettes, they started selling nicotine free chewing gums and other substitutes, which boosted their sales and encouraged the brand.

 Simon Sinek gives tips on how to form your vision statement, in writing which, he says, we must ask questions such as: Is it really inclusive?

~ Ms. Viji Hari

Simon Sinek gives tips on how to form your vision statement, in writing which, he says, we must ask questions such as: Is it really inclusive? Is it designed only for particular customers or is it open to everyone? Is it flexible? He clearly states that we must write down our mission statement, record it and make it public That will help us to stick to our cause, even during tough times.

Ramaprasad: What is your view on current leadership of organizations that you've been dealing with? Do leaders operate with finite mindset or infinite mindset?

Babu: We have examples of both. When I started my career in the 90s, there were some great pharma companies They were started by founders who had great passion for serving humanity and bringing affordable, safe medicines to the world In some cases, when the next generation takes over, probably the focus and the priorities get changed. They couldn't stay in the game. Eventually, some of the star companies in my early years, now don't even exist. There are also some companies like Pfizer who are more than 100 years old in India

Viji Hari: The CEOs who have to perform under intense investor pressure probably succumb to the pressure and forget the long term vision. Leaders and CEOs must ensure that they have an infinite mindset Simon Sinek suggests that a CEO must be renamed as CVO–Chief Vision Officer. He points out that the average life span of companies figuring in S&P 500 index in 1970s used to be close to 61 years; it is 18 years now. He also points out the huge gap between a CEO’s salary today as compared to that of the lowest paid worker in his/her firm This will make the CEO focus on making short term money, rather than developing an infinite mindset.

Ramaprasad: How easy or difficult it is for you to build a trusting team today?

Viji Hari: It is not easy but very important One of the simple exercises that I do with my team spread across India, is that we meet once every year in Chennai, in a resort, so we can bond well. Instead of discussing the company goals and the vision for the big things, we talk about each other's backgrounds and what's happening in their personal life This has really helped me in the long run. The stories that some people share are very heart moving. People end up in tears We open up and share more than the numbers Simon Sinek talks about how in Shell, they built trusting teams that must work in hazardous conditions in oil rigs and it’s a powerful story Babu: Leaders have to be very choosy in getting the talent who are passionate and aligned with the vision of the organization. Generally, we tend to buy talent from market who have the skills For example, in pharma, I

may get the temptation of hiring people who know the science of medicines or pharmaceutics or drug safety. They're very important, no doubt. But in addition to that, they should be passionate about what the organization does Technical skills can always be trained. What we learn today is going to become obsolete tomorrow. We all have to be students lifelong Also, the leader must create a safe environment where people are able to open up, speak freely, share their ideas and mistakes and accept that they don't know Communication, alignment with the vision and a safe environment are three things that make a lasting theme.

Ramaprasad: How relevant is infinite mindset to the current generation?

Babu: Absolutely important The present generation get distracted a lot with multiple things and technology. They are keen on immediate results and instant gratification that reduce your patience. I loved Test matches but today’s generation want only T20 matches. The attention span and our patience are all coming down If the younger generation stick to what they love, I think, the future will be in smart hands and they will lead the world into something that is very different

Viji Hari: Organisations now gear up to change the policies to accommodate the thought process of the younger generation. They are very clear on what they want They don’t look at the long term But, we saw during the Chennai floods the younger generation coming up and helping out a lot. I'm sure the future is in safe hands 

We are all aware of the terms incubators, accelerators and angel investors; but we have not heard so much about these in the academic context. That such an ecosystem exists within an academic institution IIT Madras is a rarity. Can you speak about that?

Idon't think we have solved the entrepreneurial academic ecosystem puzzle completely We have made some advances. We have four parts to our ecosystem. The first part is ideation, where ideas get generated This is a critical part of any entrepreneurship ecosystem because without ideas, we don't have companies. The second part is the preincubation part, where we test the ideas. Not every idea necessarily lends itself into being an entrepreneurial venture Possibly, about 10 or 15% of good ideas lead to good businesses. Here, we stress test those ideas. The third is the incubation segment. The fourth segment is where we do all the support activities to enable these three segments.

There are a number of research labs at IIT-Madras and a number of faculty doing research. Ideas come out in the normal practice of doing business at IIT In

Universities are hotbeds of innovation. Creating an entrepreneurial ecosystem within a university is a critical step to commercializing innovations What is the experience of IIT‐Madras in creating a vibrant entrepreneurial ecosystem? MMA‐KAS organised a fireside chat . Prof Ashwin Mahalingam, Faculty ‐ Department of Civil Engineering, IIT‐Madras, shared his thoughts with Mr V Shankar, Founder, CAMS & Director, ACSYS Investments Pvt Ltd.

parallel, we have students who think creatively sitting in hostels, having conversations with other students and trading ideas. The co-location factor is extremely important. IIT being a residential institute has its own benefits We also have industrial consultancy and sponsored research cell which incidentally, is celebrating its 50th anniversary this year and which allows us not only to do research theoretically in our own spaces, but also collaborate with industry to do research. At the top, we have the Centre for Innovation CFI).

When we study engineering, nobody likes workshop; but that is where we do something with our hands. The rest of it is all theoretical. Unfortunately, workshops in most engineering colleges are very structured and don't lend themselves towards innovation and creativity So we came up with an idea of creating a workshop that would be a kind of ‘by the students, of the students and for the students,’ completely managed by students and where they could do whatever they wanted This is what we call the

Centre for Innovation Very generously, the alumni of 1981 batch, to which you (Shankar) belong, funded this centre. We now have a laboratory, where the tagline is, ‘walk in with an idea and walk out with a product ’ We have all kinds of equipment and machines available.

There are already existing groups of students who are building race cars and rovers. You can join an existing group or you can start your own group It doesn't matter if you're a civil engineer; you can still join the robotics group. It doesn't matter if you're a chemical engineer; you can start making drones. No rules at all The funny thing is that all the hustle and bustle of activities take place at 3 am. The Centre for Innovation has been a wonderful melting pot of students where they leave all their baggage like the branch they are in, the place they are from behind They have the freedom to do whatever, without the spectre of a grade looming over their head.

Pre‐incubation

In the pre incubation part, we have a program

(Nirmaan) wherein students can explore the commercial potential of their ideas. We put them through a one year program and try to see if there is a business behind it Typically, we have about 10 or 15 teams a year A team could have two people, three people, etc They work on the technology and we help them think through the business side of it, to figure out a business model and business plan and to go and speak to some customers A lot of alumni come in and mentor them The ideas may work or not. If it doesn't seem to work, no regrets. But at least, you have clarity in your mind.

 It doesn't matter if you're a civil engineer; you can still join the robotics group. It doesn't matter if you're a chemical engineer; you can start making drones. No rules at all.

We hope that some fraction of students that come into Nirmaan will start a business Some of our more successful startups today have come through this pipeline.

We also have an innovation ecosystem project where we tell our faculty to go beyond publishing a paper. If they are interested in patenting it, we are ready to give them a little bit of funding. We have restarted the MS in Entrepreneurship program The output here is a validated business plan You can apply for MS in Entrepreneurship after you graduate. Every six months, we put down a list of projects that faculty have and the kind of people that they're looking for Sometimes, they look for people with a technical background, sometimes with more of a liberal arts, economics or management background to work on the entrepreneurial side of the business

Recently we've started the GopalakrishnanDeshpande Centre for Innovation named after two of our eminent alumni who funded this. We focus on customer discovery who your customers are It's a seven-week program, where we force you to talk to 100 customers and decide who exactly is your customer and what should your product look like

Lastly, we have the entrepreneurship cell, which I am currently the faculty in charge of. It's completely student run and it evangelizes entrepreneurship. Eminent people from the entrepreneurship world give talks to our students We run competitions, so students can test their ideas and pitch them in front of an audience of VCs.

Incubation

We have the main incubator, which is the IIT Madras Incubation Cell (IITMIC). Then, we have a few thematic incubators, which are in a sense sub-

incubators of IITMIC We have a bio-incubator that focuses on biotech RTBI is a rural technology business incubator and it focuses on rural technology. We also have Health Technology Innovation Centre, which focuses on med tech

The incubation cell provides you some space, a desk, power and internet connection. It provides a little bit of seed funding as a grant and a little bit as a loan. You can hire a few people and get something manufactured or fabricated IITMIC provides you a brand. It also provides a lot of mentorship from faculty or alumni. We also we have tie ups with legal and HR agencies which can help in getting employees, writing employment contracts, filing tax returns, etc and you can focus on running your business.

Support system

To do this, we have a number of people who support us. Ten years ago, our alumni created the IITMEF the IIT Madras Entrepreneurship Forum. A lot of support is provided by our alumni We also have connections with TiE and the Keiretsu forum, which are entrepreneur or angel investor forums, where people interface with us and support our ecosystem We have all these moving pieces, essentially focused on trying to get ideas, test them, and scale them, so they become successful businesses.

We were the batch responsible for funding the IIT Madras CFI. We had our 25th reunion in 2006. When we went to the hostel rooms, we found students just sitting in the rooms and playing computer games. Nobody played any sport. That triggered us to set up the CFI. Today, if you go to the institute, they talk about pre-CFI and post-CFI days and that it has created a massive difference to the DNA of the institute. As alumni, we are proud of that. Now, can you tell us about the challenges you faced and learnings in this whole process.

In the pre-CFI days, research was happening and we had our research labs Professor Ashok Jhunjhunwala, an academic with more of a practical orientation and trying to make products rather than just do research, started the RTBI Rural Technology and Business Incubator When we set up the CFI, entrepreneurship was far from our mind. We thought that the students were moving away from engineering after graduation The idea was to get students to innovate so that they would become better engineers

About ten years ago, our then Director Mr Bhaskar Ramamurthy went to the US to meet our alumni. When they asked him how they could support the institute, he said that he saw entrepreneurship as the future That galvanized the alumni and what followed was the IIT Madras Entrepreneurship Forum. So at that point, we had an incubation cell, entrepreneurship forum and

 We realized there was a lot of student energy in entrepreneurship but not as much faculty energy and involvement. We always felt that the faculty oriented startups are probably going to be our long term and more successful startups.

alumni who were ready to mentor, but we had no startups Some students were doing innovative, techy stuff in the hostel but these were not getting wrapped up. That motivated us to start Nirmaan and later scale it up. In the initial days, the entrepreneurship cell had just one or two students but slowly the interest ramped up. Now it's a 200-strong student body.

We realized there was a lot of student energy in entrepreneurship but not as much faculty energy and involvement We always felt that the faculty oriented startups are probably going to be our long term and more successful startups. That's when Kris Gopalakrishnan and Deshpande came together and we started a program where every faculty tries to find a student entrepreneur and help them in discovering customers. Then they can be a part of Nirmaan and so on

Convincing students and parents

The big challenges in the beginning were trying to convince students and faculty that entrepreneurship was even an option In the initial days, when we organised a panel discussion on entrepreneurship and sent out emails to about 550 faculty on campus, nobody responded Then after our Director wrote a slightly stronger email, 15 people showed up out of 550. Even those who came told me that for getting promoted from assistant to associate professor, people ask only about the number of papers they have published and the quality of the journals that publish them. “Nobody asks me about startups and why should I do this?” they said.

The students said, “I've got 20 lakh per annum job offer You are telling me that I should start up a company where, after struggle, I will make no money. Why do you want me to try this?” Slowly after some success stories and role models came up, the media picked them up and gave publicity. It took a while to convince the students that a startup was not that difficult

But convincing the parents of students was another issue. I've had calls from parents asking me, “Why are you corrupting my son / daughter? I sent him (her) there because they would get an IIT education and make their way up a nice multinational corporation And you're talking about entrepreneurship, how dare you do that?” We had to tell them that their son or daughter decided on their free will Getting the culture built was extremely challenging and time consuming The only mantra was that we got to keep at it. At one point, the alumni mentors far outnumbered the startups But they continued to persist

Slowly, over a period of time, the Institute also did

 The students said, “I've got 20 lakh per annum job offer. You are telling me that I should start up a company where, after struggle, I will make no money. Why do you want me to try this?”

a wonderful job in publicizing entrepreneurship, which I think was very important Every time there's a competition, we nominate somebody and when they win, we publicize it. We give credit to people who do things beyond just publishing in a variety of forums We have pots of money that are available for research that could be commercialized. It has been a tough journey and we are by no means done yet. There's still a lot of work to do

A couple of startups that have been successful with origins in IITM are Ather and Agnikul. Agnikul does 3D printed rockets and the first rocket takeoff is scheduled for later this month.

Planys Technologies does underwater robots that help fix underwater pipelines and dams Another startup that I was involved with does modular housing. It builds foldable houses and it turned out to be a godsend during Covid, for quickly setting up some kind of a vaccination facility or a clinic.

I used to teach entrepreneurship class for Tarun and Swapnil of Ather. Interestingly, they both graduated from IIT, went to work, came back and said, “What we were doing in the class was far more exciting than what

we are doing at work ” It was in 2013 or 2014 Nobody really thought then that commercial EV was possible Fortunately, a lot of people threw their weight behind Ather. A number of alumni and faculty supported it. The founders said, “Come what may We are not going to just develop a technology and sell it. We're going to build a business.” Not only have they done it successfully but also, they've been an inspiration to a lot of other people Tarun was one of the student presidents of the E-cell when he was here. Not only did he gain from the experience of running the E-cell but also, he gave back by evangelizing all this throughout the institute A lot of synergies are required It is not just one intervention or one path that you go through.

Democratizing education

Now let’s move away from the IITM entrepreneurship ecosystem. Since the new director Dr Kamakoti has taken over about a couple of months back, the emphasis is on democratizing education. It’s not that you can enter an IIT only by clearing the JEE. Along those lines, a number of initiatives have taken place. There is a BSc in Data Science and number of online courses which are available to anybody.

I'm also a firm believer in democratizing education. We opened up several years ago, starting from the time when Professor Anand was the Director This was followed up by Bhaskar and now Dr Kamakoti, who is trying to really ramp it up. We have the NPTEL platform the National Program for Technology Enhanced Learning, where IIT Madras as well as other centrally funded technical institutes (CFTIs) put up their courses online. There are a number of ways you can use them. You can just view them or take a course and write an exam and get some credit for it If you get credit in a few courses, then you can apply for a certificate. There are multiple courses on NPTEL. You can choose a course, the institute and even the professor who handles that The idea is that this should be accessible

 If you get credit in a few courses, then you can apply for a certificate. There are multiple courses on NPTEL. You can choose a course, the institute and even the professor who handles that.

to everybody and these courses are free

The online B.Sc., program in Data Science is a next step. The difference between the traditional program and this is that you can take it at your own pace You can drop out after a year and probably get a certificate or drop out after a couple of years and get a diploma.

If you complete the four year program, you get a BSc degree from IIT Madras It isn't free for all There is a qualifying test but it's far easier than the JEE There are many heartwarming stories of people who have taken this course. Now we are working on offering Civil Engineering online There's a lot of infrastructure being built and people who are in construction learn on the job. They would love to go through an IIT curated six month program, to understand a bit more about concrete, construction technology and so on We've also launched a program on electric vehicles.

Democratizing entrepreneurial ecosystem

What are you doing to democratize entrepreneurial ecosystem?

We help colleges to setup CFIs and E-cells. The Ecell has a campus ambassador program, where we have students in a number of campuses all over India We

talk to them and they, in turn, try to evangelize the cells in their campuses nationwide CFI also does something similar It is a bit more tangible because there is a workshop there. In parallel, the incubation cell is also trying to connect with incubators in other colleges.

On the one hand, we are happy to partner with people and just transfer knowledge On the other hand, we're also happy to go and incubate. Perhaps, they don't have all the facilities required to successfully incubate. So we offer space or technical support, whatever it is We have tied up with 12 colleges in the south Some of them include Crescent Engineering College, Sona College and Madurai Thigaraja Engineering College.

We had the research culture to start with, without which none of this would have happened It is very important to have research and innovation culture. Part of it is the faculty writing proposals and doing research. The other is restructuring the curriculum to make it a bit more open ended, doing more group projects rather than examinations, so that both faculty and students learn by doing something

The second learning, in my personal view is that we wouldn't even be at 50% of where we are, if it had not been for our alumni. There are valuable skills that the alumni can impart. It is very important for colleges and universities to start channeling their alumni

Education is ripe for disruption. There are people commercially trying to do it. But I think as a centrally funded institution, IITM has taken the responsibility and is executing it using technology. How does a typical professor’s time look like in IIT?

When I tell people that I'm a professor at IIT, they assume that I teach I do teach but roughly, on an average, three to four hours a week That's not just me, most of us teach one to one and a half courses a semester. A course is about three hours a week. We've got teaching assistants

In the early part of my career, about 70% of my time went into research, because I was trying to build up a research stream, research lab, research, pipeline and all of that And, in places like IIT, we do a little bit of administration We are on various committees So in the early part of my career, it was 10% teaching, 70% research and about 10% on projects with companies and administration Of late, the amount of time I'm able to devote to research has come down. Though I still like to put in about 30 to 40% of my time into research, it is becoming difficult More time goes into working with companies more on the consulting side, which is not basic research but applied research. I am also setting up systems at IIT. It's not just me. There are dozens of other people who have contributed towards this picture I'm trying to set up a new School of Sustainability at IIT. There are a number of institute building activities that we end up doing. My teaching now stays at 10%; Institute building and outside facing activities at 25% and research occupies the rest. 

 It is very important to have research and innovation culture. Part of it is the faculty writing proposals and doing research. The other is restructuring the curriculum to make it a bit more open ended, doing more group projects rather than examinations, so that both faculty and students learn by doing something.

What kind of startups do the people who work in IIT generally go after?

They take an idea that they liked and worked on and then try to push that forward. In that process, they discover whether it's an import subs tu on or if it's an exis ng market that they're trying to disrupt

What is the approximate timeline for a startup in IIT?

It depends on the type of startup A biotech entrepreneurship some mes takes decades, because you have so much of research involved Apps, for instance, can be up and running in three months Ather Energy was one of our first startups My colleagues who are experts in non‐destruc ve tes ng of drones, robo cs, etc. started up a few companies, which we call deep tech startups For these, it roughly takes anywhere between two to three to five years, depending on where you are. Although the incuba on agreement we sign is for 18 months, the support we commit to, is o en far beyond this

How can we commercialize our patents?

The process of commercializa on is reasonably well laid out. There are various stages you go through at IIT. We have an IP cell with some people who have techno legal background The paperwork is done by the cell and the research is done by the faculty. But it's going to probably cost you more to maintain the patents than the revenue you may generate out of the

a vision to strengthen some core areas"

patent. There's the myth that once you have a patent, companies will just come and buy it from you The onus is on the faculty to take it forward and without commercializing the patent, you really aren't pushing the entrepreneurial envelope far enough. Patents are a good start because that means somebody is doing something crea ve But we can’t be sa sfied merely because we have a patent.

What entrepreneurship options are there for Tier two and Tier three university students?

Every year, IIT Madras holds an E Summit Entrepreneurship Summit It's an intercollegiate entrepreneurship fes val, just like Shaastra, Any student from any college can register I think it's in March or early April this year Students from er two and er three colleges interested in entrepreneurship can register for this summit, come and spend three days on campus and listen to a bunch of talks, day in and day out There are a number of workshops that they can register and par cipate in. There are also compe ons for people with various levels of maturity. If you have an idea, you can pitch it in a compe on If you don't have an idea, we'll give you a hypothe cal situa on where you can put yourself in an entrepreneur's shoes and try to strategize as an entrepreneur The second step might be to become a campus ambassador in their college, affiliated with our entrepreneurship cell.

The entrepreneurial ecosystem has to be established independent of the curriculum. Now the course content of our institutions is so tough. How can we integrate the entrepreneurship system with the course curriculum to make the students aware of and get involved in the entrepreneurial journey?

It's a problem we also dealt with. Some universi es offer independent credits when you affiliate with a professor on a project That's one way of doing it In some cases, the final year project that everyone has to do can be oriented more towards entrepreneurship. It's also important to start offering entrepreneurship courses in the curriculum

It may be easy for IIT to attract companies to incubate. What can Tier 2 or 3 colleges do to attract research and innovation work in their institutions?

One is to build some exper se in a par cular area. I see more companies who want to work local rather than travel over hills and valleys to come to an IIT The university or the department must have a vision to strengthen some core areas As a civil engineer, if I want to strengthen myself in concrete technologies, I must start recrui ng some faculty and push some research in that area Build that capability, then slowly start working with the cement manufacturers and start building outwards from there. You must align with local industry That's the way to start 

"Have