'Need To Master...': Zoho's Sridhar Vembu On How India Can Become A Great Manufacturing Nation

Zoho Corp chief executive Sridhar Vembu on Wednesday has called for a strategic shift in India’s industrial policy, arguing that the country must master high-value capital goods to evolve from a rising factory hub into a truly great manufacturing nation.

Vembu’s remarks came in response to a post on X noting that India has broken into the world’s top five manufacturing economies with an estimated output of 443.91 billion dollars, behind China, the United States, Japan and Germany.

The original post on X read, "India breaks into Global Manufacturing Top 5: China: 4.87 trillion dollars, USA: 2.50 trillion dollars, Japan: 995.31 billion dollars, Germany: 803.21 billion dollars, and India: 443.91 billion dollars."

Responding to this, Vembu cautioned that manufacturing scale alone does not equate to technological depth or sustainable prosperity. In a post on X (formerly Twitter), Vembu wrote, "Notice how Japan and Germany are such huge manufacturing powers, with much smaller population than India and with vastly higher labour costs than India or even China. Switzerland and the Netherlands also punch way above their weight in global manufacturing."

He pointed out that these countries have built their strength on "mastery of capital goods such as advanced and high precision machinery, advanced materials, sensors, mastery of highly intricate industrial processes (such as making specialty alloys, growing crystals, specialty chemicals), optical/imaging/medical equipment and so on."

According to Vembu, these segments are characterised by "very high value addition," which allows firms to remain globally competitive even while paying significantly higher wages.

"That is why high-wage nations are such huge manufacturing powers. China has been catching up in these areas and as it does, it is becoming a high wage nation," he observed, drawing a link between technological capability, value capture and income growth.

Setting out a roadmap for India, the Zoho co-founder argued that the country’s long-term ambition must extend beyond low-cost assembly and volume-driven production.

"To be a truly great manufacturing nation and achieve high income for our people, India needs to master all these areas. We can do it," he concluded, framing the challenge as both an economic imperative and a national capability mission.