In an exclusive interview with CNBC-TV18, Memani said, Indian private sector is not shying away from investing but the cost structures that we have in India relative to some other countries, and in particular, one or two countries, does not make it viable to manufacture it in India unless it is backed by government aid like production linked incentive (PLI) schemes.
It takes time for the backward integration to happen and an ecosystem to develop. Moreover, the technology is restricted in many cases, Memani pointed out. Therefore, the government needs to zero-down on which PLI schemes are effective and may be provide further support possibly in the form of duty cover for the next few years for fostering the ecosystem.
“In the recent years, especially 2022 to 2024 and even 2025, the growth in private investment has been very strong,” Memani said adding: “The challenge that I would say, has been in the last four to five months when you have so much of uncertainty around in the world.”
The balance sheets are very strong. The posture of entrepreneurs, all the businesses, or CII members is generally very forward-looking. A lot of them are looking at investing, according to the newly appointed CII President.
“There is clearly an intent”, emphasises Memani while outlining the challenges beyond global uncertainties. Referring to lengthy time frames for getting regulatory approvals, Memani cited an examples of how securing environmental clearances can take up to 12 months and for setting up a manufacturing company, there are about 175 to 200 approvals that are required.
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The government is very conscious about this and they have set up a high level committee to address the issue.
Next, the issue hindering private investment is lack of skilled manpower. “Lot of CII members here, they want to grow, they want to expand, but the Capex (capital expenditure) spend is getting slowed because the availability of skilled manpower, or just availability of manpower, in some cases,” Memani said.
Speaking on the lack of investment in research and development by private players, Memani underlined that there has been good amount R&D investment in sectors like pharmaceuticals. However, if there is one thing where industry has some homework to do, I would say R&D is probably on top of the list, he added.