India must build MSME, start-up ecosystems like China: Yogesh Pandit, Director, Pravriddhi at IISc

One of the key lessons India can learn from China is the importance of consistency, says Yogesh Pandit, Director of Bengaluru-based Pravriddhi, a product accelerator program by the Foundation for Science, Innovation, and Development at IISc. China has steadily built industrial clusters, enhanced logistics, and offered long-term incentives, allowing its industries to scale globally. India must also chart a similar course by creating ecosystems where micro, small, and medium enterprises (MSMEs) and start-ups thrive alongside larger enterprises, Pandit adds.

However, on the question of the probability of the US tariffs on India creating a natural alignment between India and China in the present context, Pandit expresses scepticism, stating that he doesn’t believe tariffs alone will lead to such an alignment between the two neighbouring countries. If anything, he argues, the situation underscores the need for India to emerge as a counterbalance in global manufacturing, neither dependent on nor overshadowed by China. “A world that is looking for supply chain diversification will see India as a credible alternative if we play this right.”

Pandit points out that tariffs of this kind, like those recently imposed by the US, create strong headwinds, especially for labour-intensive and mid-value exports, such as textiles, auto components, and electronics. At the same time, he says, they present an opportunity for India to reassess its positioning. “Instead of depending on tariff arbitrage, we must focus on innovation and value addition, building products that are not only made in India but also designed in India for the world,” he notes.

The US recently raised tariffs on Indian goods to 25%, which doubled to 50% after an additional 25% penalty—imposed by President Donald Trump in response to India’s purchase of Russian oil—took effect on August 27.

‘Need for deep manufacturing capabilities’
India’s significant expenditure on importing technology-intensive capital goods and systems, valued at nearly Rs 1.5 lakh crore, highlights the potential for domestic development and manufacturing.

“India’s export story has often been held back by fragmented ecosystems. We have islands of excellence, but we have struggled to translate them into globally competitive industries. The challenges have been systemic: insufficient R&D investment, gaps in supply chain integration, and a lack of sustained policy that aligns innovation and development with manufacturing,” says Pandit.

Pandit says that policies need to focus on two critical areas: giving long-term patient capital to help with technological development and growth, and boosting exports by creating strong manufacturing capabilities instead of just offering incentives. Without this shift, he cautions, India risks staying a nation of traders rather than becoming true drivers of growth.

“At Pravriddhi, our core mission is to create an indigenous pipeline for critical technologies. We are bringing together academia and industry to leverage their strengths and scale them into commercially viable products. By doing so, we not only reduce import dependency but also shift India from being a net-technology importer to one that owns intellectual property, stabilises domestic supply chains, and builds world-class products,” says Pandit.

Academy-industry synergy
India’s manufacturing future cannot be built in silos. Our academic institutions are rich in ideas and intellectual capital, while our industries understand markets and scale. The missing link has been structured collaboration. “Pravriddhi provides a platform that is designed precisely to bridge this gap by enabling the confluence of R&D with commercialisation. It further encourages co-innovation and real-world problem solving, where academia and multiple industries can synergise,” says Pandit.

On skills, he says, India needs a dual approach: world-class skilling programs that match industry demand today and continuous reskilling to prepare the workforce for tomorrow’s technologies. Through industry-driven curricula, students get a taste of live projects early, and we can create not just job-seekers but also job-creators in product innovation. Pandit says that at Pravriddhi, they are working directly with MSMEs to solve this. “We are opening access to advanced R&D facilities, providing mentorship by subject matter experts (academia), and equipping them to compete globally in high-value markets, thereby creating a truly market-driven, design-led ecosystem. When complemented with intensive skilling platforms and government policies, we can create a generation of talent ready for the next leap,” he says.