Mumbai, July 11: The Indian chemical industry must get out of its cottage industry mindset and learn to "partner with the government to open up new markets" if it wants to take on global chemical companies.

Delivering the GP Kane Trust Lecture, "The chemical industry in a new world order," Reliance Industries vice chairman and managing director, Mukesh Ambani, said that it was necessary to develop an India strategy to take on competition."We must get out of our cottage industry mindset. Unless we graduate our thoughts and actions that are benchmarked with the best in the world, any mission to take on global chemical companies would be a non-starter," he said.Ambani said that unless a new venture can perform well in a few years of the down cycle at nil import duties, it would not make sense to invest. "A world with free trade and investment is merciless with under performers," he said.

He said that the Indian chemical opportunity was worth at least US $400 billion over the next 15 years, 20 times bigger than it is today. To harness this market opportunity, India is blessed with intellectual human capital required to manage and compete in the global chemical industry at a tremendous cost advantage. "While the employee cost to sales ratio is 25 to 30 per cent in the developed world, the Indian chemical industry can sustain a five to eight per cent ratio over the next many years," he said.

"Many of us spread ourselves too thin or want to be in all part of the world when we ourselves are sitting on a large opportunity," he added. Ambani said that in the last few years, increasing competition in the non-core areas had forced global companies to abandon the diversification path and redeploy assets. Shareholder pressures had made these moves necessary. He stressed that the real challenge lay in people and organisational skills. "The intellectual capital of an organisation will be at a premium and will reflect superior performance. With similar access to capital, technology and markets in a new world order, what will differentiate an organisation's competitiveness is its people and organisational skills," he said.