A Cultural Context to our Weakness in Manufacturing

 A Cultural Context to our Weakness in Manufacturing. 

Dinesh K Kapila, CGM (Retd) NABARD

(Published by The Business Sandesh 3/3/26)

 

Over the years, one  thought has preoccupied me. India faces notable challenges as regards innovation in manufacturing, influenced by both deep-rooted cultural attitudes and historical policies that prioritized stability over risk-taking and experimentation. These factors have contributed to low investments in R&D, preference for imported technology, and a services-led economy rather than a robust manufacturing sector. The preference for setting up units or businesses in the services sector and for white collar employment, engineers vying for a Masters in Business and switching to Marketing, Finance, Banking, Consultancy etc. A seasoned senior HR professionaltold me jobs as junior salesmen were preferred rather than as apprentice. Camps attended by me over the years revealed a reluctance to work on the shop floor but certainly a preference for employment as an accounts clerk or storekeeper.  

 

If we deepen the discussion, a team of experts from Israel pointed out, the large farmers would often ask their farm hands to test the soil with their hands. Could be convenience, yes, but is it deeper, a reluctance to work with their own hands.  Reading on this concern led to the awareness that several other visitors over the centuries, especially during the Mughal era and the early colonial period, had remarkably similar observations. They often echoed Al-Beruni’s core critique: that India possessed very good artisanal skills but lacked mechanical innovation and a "scientific" approach to manufacturing. Not the only factor relevant in the context of today, but it has a major role.  

 

Al-Beruni opined that Indians exhibited a marked preference for theoretical over practical learning.  We have to become tinkerers, to combine knowledge with a manual hands onapproach; this produces innovation.  Our entrepreneurs have shied away from a manual orientation and technology formanufacturing, the preference for developing applications over manufacturing say Lithium Batteries, that is another pointer. This could be one reason to have around only a 22 % contribution to the GDP from manufacturing. The Government of India has launched numerous initiatives to enable a concerted push for manufacturing. However, we have to also examine our own cultural moorings and preferences. 

 

Alberuni’s observations on Indian manufacturing and innovation are unique because they come from the perspective of a scientist and polymath. While he deeply admired Indian theoretical science, he was notably critical of their practical application and mechanical innovation. His observations are focused on the Gap Between Theory and Practice, Alberuni noted a strange paradox, a world-class mathematical and astronomical knowledge, yet a marked unwillingness for "tinkering" or an "innovative" spirit when it came to mechanical tools. The Mathematical Brilliance was praised, the use of the decimal system, the concept of zero, and their ability to calculate the Earth's circumference and planetary movements with high precision. But the inertia on mechanical developments, while we undoubtedly had the theoretical framework to build complex machines (like those being developed in the Islamic world or China at the time), this was rarely applied to improve daily labor or manufacturing processes. Even today, this is a does strike a deep chord. 

Francois Bernier (17th Century), a French physician who lived in India for 12 years during the reign of Aurangzeb, noted that the artisan was socially degraded. He observed that a craftsman might be a master of his trade, but he had no social mobility and no incentive to innovate because any extra profit would likely be seized by local officials. Further, he was amazed that Indian artisans could produce beautiful work with almost no tools. He remarked that a French craftsman would need a complex workshop to do what an Indian craftsman did sitting on the ground with one or two basic instruments. However, he saw this as a weakness, noting that it prevented the development of labor-saving machinery.

Sir Thomas Roe (Early 17th Century), the first English ambassador to the Mughal court observed that Indians were incredible at copying European technology but showed little interest in improving upon it. He opined that the sheer abundance of cheap, skilled labor made "tinkering" with labor-saving machines unnecessary in the eyes of the Indian elite.Babur (Early 16th Century) made similar observations but acknowledged that "workmen of every profession are innumerable," noting that for any task, thousands of specialized craftsmen were available. As the Industrial Revolution took hold in Europe, the gap Al-Beruni first spotted became even more apparent to visitors like Abbé Dubois, around the 18th Century, he observed that The Weight of Tradition along with the caste system acted as a "brake" on innovation. Because a son mustfollow the trade of his father, there was no room for "outsiders" to bring new ideas into a craft, there was no incentive to innovate or to infuse technology. A weaver’s son wove exactly as his grandfather had, leading to what Al-Beruni called "refinement without invention."

Because the scientist didn't work with his hands and the craftsman didn't read the science, manufacturing remained traditional and repetitive rather than evolutionary. Improvements were passed down as "trade secrets" rather than being systematized and improved through scientific inquiry.  My late father, Major General Rajendra Nath, PVSM (Retd), observed in his book, Military Leadership in India, that though the Arabs captured Sind as early as AD 712, the stout defence by the Rajputs prevented further ingress. There was no major attack for another 220 years, but this period was not utilized to develop better weapon systems and platforms. The impact of the caste system on the development of innovative or better weapons and confining the art of war to a narrow segment and its fallout has been stressed by him too. While men, materials and resources were available, the ability to harness this into a viable base for innovation was lacking. The stirrup was developed in India but its application for an effective cavalry was found wanting.      

The views as above of different observors over a period of time possibly do point to some structural factors, firstly  when we have abundant Labor, when we have a large mass of people who can do high-quality work for a small remuneration, maybe the preference to mechanise is reduced somewhat. The impact of the caste system introduced a certain social rigidity, the "thinkers" (intellectuals) and the "doers" (artisans) were kept in separate social boxes, preventing the scientific mode and thought from being applied to manual crafts. Another observation often pointed out is what we can maybe classify as Intellectual Insularity, the recurring sense among the elite that their traditional methods were already perfect, which stifled the curiosity needed for breakthrough innovation.

Certain observations of Alberuni do merit attention, his observation was that refinement rather than innovation or invention was preferred. The strength in Metallurgy was impressive, particularly Indian steel. the skill of Indian artisans was appreciated but deemed to be due to a result of long-standing tradition and specialized manual labor rather than a breakthrough in chemical or mechanical engineering. The refined fineness of Indian cotton and silk was observed, but this was achieved through the incredible patience and skill of the human hand, rather than through the invention of better looms or labor-saving machinery. Possibly the most appreciated was Architecture and Hydrology: He was genuinely amazed by Indian tanks and reservoirs. This was one area where he saw a successful synthesis of engineering and practical need.

While duly acknowledging that the caste system of that era needs a further study as to its nuances, the objective here is to underline the impact, cultural, economic and on the ability to innovate and to develop better mechanical systems and infuse higher technology. Moving on to the 18th and 19th centuries and later, the British colonial rule suppressed indigenous industries to favor raw material exports, preventing an organic industrial revolution and fostering a dependency on imports. 

Post-independence, the License Raj (1947-1991) imposed heavy regulations requiring government approvals, stifling competition, entrepreneurship, and technological upgrades while causing bureaucratic delays. This era diverted India from a manufacturing boom like in China’, with persistent issues like poor infrastructure and rigid labor laws keeping manufacturing at 3% of global output. Firms needed government approvals for new plants, capacity increases, or product diversification, creating delays of years and high compliance costs that deterred investment in R&D or new tech. Businesses spent more resources on building relationships with the Government for permits rather than on upgrading machinery or skills. Low R&D persisted at 0.5-0.7% of GDP, this kept manufacturing uncompetitive globally. Product Development and innovationhas been an Indian manufacturing weakness, it applies equally to the rural artisan.  Japan incidentally had an immense curiosity for western science and technology, even in the 17 century. 

Indian culture emphasizes risk-aversion, hierarchy, and rote learning from colonial legacies and societal norms, discouraging deviation from predictable paths and favoring “safe bets” over bold innovation. Businesses often prioritize low-cost replication or imported tech due to fears of duplication, weak IP protection, and a market bias for bargains over premium innovative products. This results in low private R&D spending, with firms reinvesting minimally amid compliance burdens and a collective mindset that shuns failure. The License Raj, India’s regulatory regime from 1947 to 1991, imposed extensive licensing requirements that diverted manufacturing firms’ focus from innovation to bureaucratic compliance, severely limiting technological progress and efficiency. Reforms in 1991 dismantled much of it, enabling faster growth but leaving long-term innovation gaps that still continue.  Post-reform evidence shows productivity recovery only after licensing eased, confirming its drag on total factor productivity. A competitive economy produces high productivity, efficiency, innovation, higher investments in human resources.  

Alberuni observed, Indian scholars believe, "There is no country like theirs, no nation like theirs, no kings like theirs, no science like theirs." He argued that this self-conceit prevented them from adopting innovations from outside. He mentioned that in previous ages, Indian scholars had been more open to Greek and Persian influences, but by 1000 AD, they had become insular. This lack of "intellectual trade" meant that manufacturing techniques remained stagnant while other parts of the world were beginning to exchange ideas more freely.  A wise lesson to remember even today. 

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