Shankar Sharma Slams India’s 1991 Reforms, Calls Out Government for Giving Elon Musk a ‘Free Pass’

Shankar Sharma, a prominent investor and founder of GQuant Investech, criticized India’s 1991 economic reforms for making businesses overly reliant on foreign capital and technology. He argued that Indian companies opted for joint ventures with foreign firms instead of building their own technological capabilities. Sharma pointed out that as a result, no Indian company has achieved global dominance, even in South Asia. He also criticized the Indian government’s favorable treatment of Elon Musk’s ventures, particularly Starlink, claiming that it is not innovative technology. Sharma suggested that India should prioritize supporting its own businesses rather than making it easier for foreign companies to enter the market.

Shankar Sharma Slams India’s 1991 Reforms, Calls Out Government for Giving Elon Musk a ‘Free Pass’

Shankar Sharma, a prominent investor and the founder of GQuant Investech, has shared critical views on India’s economic trajectory since the landmark 1991 reforms. In a podcast conversation with Rishi Sanghvii, Sharma argued that while the reforms were transformative, they led Indian businesses to become overly reliant on foreign investments and technology. Instead of fostering homegrown innovation, companies opted for shortcuts—partnering with foreign firms or importing ready-made solutions—which, he believes, weakened their ability to compete globally.

The 1991 Reforms: A Double-Edged Sword?

Sharma acknowledges that the 1991 reforms, which opened India’s economy to global markets, were necessary to rescue the country from a financial crisis. However, he claims that they had unintended consequences. Indian businesses, rather than investing in research and development or building their own technological capabilities, leaned heavily on foreign collaborations. Many companies formed joint ventures with overseas firms, relying on their expertise instead of developing indigenous solutions. This approach, according to Sharma, created a cycle of dependency. Over time, Indian industries became complacent, prioritizing quick profits over long-term innovation.

The Global Competitiveness Gap

This reliance, Sharma argues, has left Indian companies struggling to make a mark internationally. He points out that no Indian corporation has emerged as a dominant player even in South Asia, let alone on the global stage. In contrast, countries like the U.S., China, and South Korea boast tech giants and manufacturing powerhouses that influence global markets. Sharma emphasizes that Indian firms lack a unique technological edge, which is critical for global leadership. “We don’t have a single company that dominates even regionally,” he remarked, highlighting the absence of an Indian equivalent to Samsung, Tesla, or Alibaba.

Criticism of Preferential Treatment for Foreign Firms

Sharma reserved sharp criticism for the Indian government’s approach to foreign companies, particularly Elon Musk’s Starlink. Starlink, a satellite internet venture, has reportedly received favorable regulatory consideration in India. Sharma dismisses Starlink’s technology as “nothing revolutionary” and questions why the government is easing entry for foreign players while homegrown businesses face bureaucratic hurdles. Indian telecom and tech firms, he notes, grapple with complex licensing processes, high fees, and restrictive policies. This imbalance, he argues, stifles local innovation. “If I were in charge, I wouldn’t allow this,” Sharma stated, advocating for policies that prioritize domestic enterprises.

The Call for Self-Reliance

Sharma’s central argument is that India must shift its focus from attracting foreign investment to building self-reliance. He suggests that the government should incentivize Indian companies to invest in R&D and develop proprietary technologies. For example, instead of permitting joint ventures in sectors like defense or renewable energy, India could mandate that a percentage of components be domestically manufactured. This would force companies to innovate rather than depend on imported solutions.

He also stresses the need for regulatory fairness. While foreign investment can bring capital and expertise, Sharma believes it should not come at the cost of sidelining local businesses. He cites the success of countries like China, which protected its markets early on to nurture giants like Huawei and BYD. India, he argues, should adopt a similar playbook—shielding startups and SMEs from unfair competition while they scale.

Balancing Globalization and Indigenous Growth

Sharma’s critique does not reject globalization outright. He recognizes that cross-border collaborations are inevitable in a connected world. However, he insists that partnerships should be strategic, ensuring knowledge transfer and skill development. For instance, automakers like Maruti initially partnered with Suzuki to gain technical know-how but eventually built their own capabilities. Today, Sharma laments, such partnerships often lack this long-term vision, leaving Indian firms perpetually dependent.

Conclusion: A Path Forward

Sharma’s message is clear: India’s economic policies must strike a balance between global integration and self-sufficiency. By fostering innovation, simplifying regulations for local businesses, and reducing reliance on foreign technology, India can build companies that compete globally. “It’s time to stop taking shortcuts,” he asserts, urging a return to the ethos of entrepreneurship that values creativity and resilience over easy gains. Only then, he believes, can India produce world-leading corporations that reflect its economic potential.