Just too few Indian brands

If we look at the developed nations across the world, we find a major common feature all of them have built strong national brands. These brands evolved into a strong domestic presence, before they became top-class names in the international arena. In fact, the top five brands in terms of value, namely Apple (1976), Google (1998), IBM (1911), McDonalds (1940), Coca-Cola (1892) belong to the US. Apple products such as iPod, launched in 2001 and iTunes music store (2003), became household possessions before their viral sale in the world market. Google, soon after its creation, was picked up by another US company Yahoo! as its default search engine. Soon, it became immensely popular in the US and eventually in the world. THE AMERICAN WAY IBM in 1952 began working with MITs Lincoln Laboratories to finalise the design of an air defence computer and was eventually awarded a US government contract to build two prototypes in 1953. In 1954, the US government named IBM as the primary computer hardware contractor for developing SAGE for the US air force. IBM built 56 SAGE computers at the price of $30 million. It was after this phenomenal success at home that IBM expanded into different countries and continents. McDonalds, which opened its first restaurant in California, introduced unique concepts such as drive-in restaurants, the first of which opened in Arizona in 1975. McStop, which targeted truckers and travellers, was another brainwave of the fast food chain in the US. After its runaway success in the US we have seen the mushrooming of its franchisees all over the world. Mercedes, BMW, and Audi have driven the German reputation in the world, while Japans Toyota is the worlds most valuable automotive brand, worth $24.5 billion. Interestingly, the biggest gainer in the most valuable brand list of 2013 has been the sandwich brand, Subway, which is now valued at $16.7 billion. It is now widely accepted that if a nation is to realise its true potential, domestic brand creation is the key. It is also clear that all sectors have more or less equal potential to contribute to the economy of their respective nations. India might be one of the fastest growing economies, but it still has a long way to go in brand creation. Brands are national assets. As they grow, so does national wealth; what separates this wealth from the one created by international brands is that this stays at home. Today, India has a strong and growing consumer population, yet the rise of domestic brands has been tardy. Many multinationals have taken advantage of this sluggishness, continuing to drain wealth from our country in the form of royalty. We need to take heart and learn from our success in the IT sector where Indian brands such as TCS, Wipro, HCL and Infosys have made us proud. In fact, even today, policies are being introduced to push IT and electronics industries. INDIGENOUS IT SECTOR It all began in 1972 when the Department of Electronics permitted duty-free imports of computer systems if the importers promised to export software or software services worth twice the value of the imports within a given period of time. By 1980, several software export policies were put in place and in 1984, during the prime ministership of Rajiv Gandhi, key reforms and incentives were put in place. Today, several policy initiatives have been introduced to help the IT and electronics industries. Among these is the National Policy on Information Technology (NPIT 2012).

This will provide fiscal benefits to SMEs and start-ups if they adopt IT in their value creation. The NPITs focus will be on developing applications and solutions in numerous areas such as mobile value added services, cloud computing and social media. The National Policy on Electronics (NPE 2012) is aimed at creating a globally competitive industry in electronics design and manufacturing, which will not only meet the national demand but serve the international market as well. The accent is on domestically manufactured electronics products. A policy to develop innovation in information technology, communications and electronics was unveiled in 2013. The policy, called ICT&E R&D and Innovation Framework, 2013, promotes research in ICT&E, system design and product development in terms of nano electronics, photonics and networking. It also suggests the establishment of centres of excellence in certain thrust areas and strengthening the institutional mechanism for protection of intellectual property. ACROSS ALL AREAS The Indian pharmaceuticals industry has been a success story in brand creation. Sun Pharma, Dr Reddys, Ranbaxy and Cadila are well known. Today, the pharma industry is growing at a healthy rate of 10 per cent per year. In 1986, the government established the Department of Biotechnology, under the Ministry of Science and Technology. The government provided tax incentives and grants for biotech start-ups and firms seeking to expand, along with establishing biotech parks. All these steps helped both the Indian IT and pharma sectors emerge as shining examples of indigenous brand creation. The pharma sector too responded to the initiatives of the government. However, sectors such as aviation, FMCG, capital goods, among others, require a similar thrust. The support by the government has to be long-term and consistent, as creation of a strong brand is generally a slow and tedious process. Once a brand stands on its feet, the investments made are repaid handsomely with interest. The time has now come to make the development of strong domestic brands a national priority. These brands will be created for the benefit of the local population in the short and medium term, and for the international market in the long term. (The author is chairman of the FICCI Committee against Smuggling and Counterfeiting Activities Destroying the Economy.)