Jobs, Capitalism And The Indian Dream: A Conversation With Manish Sabharwal

Sabharwal argues that entrepreneurship, not ideology, drives prosperity and credits the 1970 Patent Act for enabling India’s emergence as the “pharmacy of the world.”

TeamLease co-founder Manish Sabharwal discusses his book Made in India, chronicling Lupin founder Desh Bandhu Gupta and the rise of Indian pharma.

Source : Ashutosh Kumar Thakur

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Key points generated by AI, verified by newsroom

• Sabharwal's book examines Lupin's rise, Indian entrepreneurial history.
• Indian pharma soared, propelled by 1970 Patent Act.
• Productive capitalism, formal jobs, long-term vision crucial for India.

In this conversation, Ashutosh Kumar Thakur sits down with Manish Sabharwal (MS), one of India’s leading corporate thinkers, employment experts and policy voices, to discuss his new book Made in India: The Story of Desh Bandhu Gupta, Lupin and Indian Pharma, co-authored with Sundeep Khanna and published by Juggernaut. Their discussion ranges from the rise of Lupin and the transformation of Indian pharma to the evolution of Indian capitalism, labour reforms, entrepreneurship and the future of India’s economic imagination.

As the co-founder of TeamLease Services, one of India’s largest staffing and human resource companies, Manish Sabharwal has long been an influential voice on employment, education, formal job creation and institutional reform in contemporary India.

What made you decide to write a full-length book on Desh Bandhu Gupta at this point in India’s economic journey?

MS: India and China had the same per capita GDP in 1991. Today, this number is five times higher for China than India, even though they are not smarter than us or work harder than us. This divergence really bothers me, and I am convinced it arises from our inability to create a fertile habitat for entrepreneurship. 

The possibilities of this book drew me in because it is a story at three levels: the entrepreneur DBG, the company Lupin, and the sector Indian Pharma. All three were unlikely adventures. Countries ranked 128th in per capita GDP are not expected to make 60% of the world’s medicines. A company like Lupin, which leads in infectious diseases by being the world’s largest maker of TB medicines, also supplies 20 billion pills every year to the US for lifestyle and advanced disease. And DBG grew up in a house without electricity or water, and the only role models around him were teachers; he would never have been an entrepreneur if he had not been fired from his job as a chemistry professor at BITS Pilani. The timing and context of these three journeys were another attraction. The timing mattered because all three were undertaken in an India that became hostile to entrepreneurship after the 1955 Avadi resolution, which sought to place the state at the commanding heights of the economy. The context matters because the long-run success of all three private journeys would be impossible without enlightened government intervention on two opposite sides of the world: the 1970 Patents Act of India and the 1984 Hatch Waxman Act of America. 

Your book often reads like a history of Indian industrial self-reliance rather than a conventional corporate biography. Was that something you set out to do?

MS: Absolutely. India is an ancient civilisation trying to find its modern voice. How did we create the world’s largest democracy on the infertile soil of the world's most hierarchical society? Why didn't we create the world’s largest economy? Our lack of mass prosperity to complement our mass democracy arises from our choices; we should not blame culture, geography or god’s wish.

Things are changing; we are no longer embarrassed by enterprise, but we still don’t fully appreciate how wealth creation actually happens. We celebrate startup founders, but we don’t sufficiently document the generation that built industries when India had no venture capital, no private equity, no startup ecosystem, weak infrastructure and a government that often viewed profit with suspicion. DBG built Lupin in India, where getting a factory licence could take longer than building the factory. Entrepreneurship during the Licence Raj was not fashionable; it was almost an act of rebellion. I thought this was the right moment to revisit that generation because India is again debating industrial policy, self-reliance, manufacturing, healthcare resilience and the role of private enterprise. It emerged from patient capital, chemistry talent, institutional resilience and entrepreneurs like DBG who thought in decades rather than quarterly earnings calls. I also felt India risks developing historical amnesia at precisely the moment when rapid tech change is making many countries question their competitive strengths. But it's important to remind ourselves that we were the people who made tuberculosis drugs affordable for poor countries and reduced HIV treatment costs from $20,000 a year to a few hundred dollars. The book is really about how poor countries become rich, one stubborn entrepreneur at a time.

People often misunderstand self-reliance. Self-reliance does not mean isolation. It means capability. Japan, Korea, and China none became powerful by withdrawing from the world. They became powerful by competing with the world. DBG understood this instinctively, and today, because of him and other co-creators of Indian Pharma, Dilip Shanghvi of Sun Pharma, Dr Anji Reddy of Dr Reddy’s, Yusuf Hamied of Cipla, and many others, Indian Pharma sells its products in more than 200 countries. 

And there’s another reason the book became broader than biography. India’s economic history is often written through a political lens. I wanted to write it through factories, laboratories, exports, scientists and entrepreneurs. Nations are transformed not only in parliament; our industrial ecosystems matter equally for global soft and hard power.

Do you see the Indian pharmaceutical sector as one of the greatest success stories of post-Independence India?

MS: Surely Indian pharma is one of independent India’s great successes, along with our democracy, the Green Revolution, software exports and digital public infrastructure.

In the 1960s, medicines cost more in India than they did in Europe. Today, India is the pharmacy of the world; the US relies heavily on Indian generic medicines due to the reliability and scale of our pharmaceutical supply chains. During COVID, India supplied vaccines and essential drugs to dozens of countries while richer nations were hoarding supplies.

What makes this story remarkable is that India achieved this without oil wealth, massive state subsidies or deep domestic capital markets. We did it through chemistry skills, entrepreneurial resilience and process innovation. Scarcity became a competitive advantage.

Indian pharma also proved something morally important: capitalism can be socially transformative. When Indian companies brought down the cost of HIV treatment dramatically, that was not merely a commercial achievement; it was one of the largest public-health interventions in modern history.

Of course, the next challenge is moving from volume to value. India is incredibly strong in generics, but we still capture a relatively small percentage of global pharma revenues. The future lies in complex generics, biologics, specialty drugs, biosimilars, AI-enabled discovery and eventually original innovation. The industry is now transitioning from being a low-cost manufacturing powerhouse to becoming a scientific innovation ecosystem. 

How important was the 1970 Patent Act in India’s rise as the pharmacy of the world?

MS: The 1970 Patent Act was foundational. It may be one of the most consequential industrial policy decisions India ever made. People caricature it as anti-business or anti-science, but that’s historically inaccurate. As Yusuf Hamied of Cipla beautifully said at the launch of this book, "We fought monopoly, not science."

India recognised a simple reality, poor countries could not afford Western pharmaceutical monopolies. We lacked the capital for billion-dollar drug discovery pipelines, but we had excellent chemists and process engineers. So Indian companies became masters of reverse engineering and process chemistry. Ironically, scarcity forced innovation. When you grow up poor, you learn efficiency very quickly. Indian pharma figured out how to manufacture high-quality medicines at radically lower costs. That capability later became a global advantage.

The Patent Act also created confidence. It allowed domestic firms to build scale, capabilities, manufacturing ecosystems and scientific talent. Without that incubation period, companies like Lupin, Cipla, Sun Pharma, Dr Reddy’s and Biocon may never have emerged at a global scale. Now the debate has evolved. The future is not generics versus innovation. The future is hybridisation: complex generics, biosimilars, AI-assisted discovery, respiratory therapies, injectables, novel delivery systems and eventually proprietary research. India’s pharma industry today stands where Indian IT stood twenty years ago, moving from low-cost execution toward higher-value intellectual property. That transition will define the next two decades.

You describe DBG as both nationalist and globally ambitious. Do you think contemporary Indian capitalism is missing that balance?

MS: Some parts of it do. There are two unhealthy versions of nationalism. One says India should fear the world. The other says India should imitate the world. DBG believed neither. He believed India should compete with the world. That’s a very different mindset. He was deeply Indian in instinct but globally benchmarked in standards. He did not think patriotism meant protection from competition. He thought patriotism meant being capable of winning in competition.

Today, many people use the phrase 'global company' very casually. But DBG’s generation understood that globalisation is not geography; it is quality. The USFDA does not care about your nationalism. Patients in Europe do not care about your slogans. They care whether your product works safely and consistently. Indian pharma earned global credibility because companies built world-class compliance, manufacturing and scientific discipline. Today, India has the largest number of USFDA-approved plants outside the United States. That didn’t happen because regulators were sentimental. It happened because Indian firms became globally competitive.

I sometimes worry that parts of Indian capitalism have become too domestically intoxicated. A large market can create complacency. China taught the world scale; Japan taught the world quality. India must learn both. The healthiest nationalism is competence. If your medicines heal Americans, Africans, Japanese and Indians alike, that’s patriotism with export revenues.

A lot of young entrepreneurs today seem to prioritise valuations over institution-building. Has India’s startup culture become too short-term?

MS: Some startups confuse fundraising with success. Raising capital is not entrepreneurship; it’s a financing event. Customers are more important than cap tables. Valuation is an opinion; cash flow is a fact. India has gone from capital scarcity to capital abundance very quickly. Whenever liquidity becomes excessive, narratives become detached from economics. That’s not uniquely Indian. Every technological boom produces speculative theatre. Railway booms did it, telecom did it, dot-com did it, crypto did it, and AI will probably do it too.

DBG belonged to what I call the compounding school of capitalism. Today, many founders belong to the PowerPoint school of capitalism. One builds factories, systems and talent pipelines; the other builds decks, narratives and valuation stories. Real businesses are built slowly. Enduring companies require governance, succession planning, compliance, culture and resilience. Those things are boring, which is why they matter.

What qualities from DBG’s generation of industrialists do you think are missing in many founders today?

MS: Patience. Frugality. Emotional resilience.

DBG built Lupin in a time when getting a landline phone connection could take years, and importing machinery involved endless bureaucracy. Scarcity creates discipline. Earlier entrepreneurs respected balance sheets because capital was precious. When money is expensive, entrepreneurs think carefully before hiring, expanding or diversifying. Excess liquidity sometimes creates hallucinations. The older generation also had a very different relationship with adversity. Failure was not romanticised. Bankruptcy was socially humiliating. So, entrepreneurs built cautiously and conservatively because they had operational intimacy; DBG knew manufacturing deeply. He understood chemistry, distribution, doctors, regulators, factories and finance simultaneously. They aimed to be good ancestors by treating their companies as Amaanats.

The Indian Left has historically been suspicious of private enterprise. Do you think India underestimated the social role of ethical capitalism?

MS: Absolutely. India spent decades believing redistribution could substitute production. But we ended up distributing poverty. Somebody must first create wealth before governments can tax it, regulate it or redistribute it. The irony is that ethical capitalism has lifted more people out of poverty than most ideological movements. Rising life expectancy, lower infant mortality, cheaper medicines, mobile phones, mass literacy, digital access: these are outcomes of productivity growth and innovation and are almost always linked to higher per capita GDP.

India’s suspicion of business came partly from colonial history and partly from socialism. For decades, we treated entrepreneurs as people to be controlled rather than enabled. Licences, quotas, inspector raj and excessive regulation created an economy where political access often mattered more than productivity. The biggest CSR a company can do is to create high-wage formal jobs. Government spending has increased almost 100-fold since 1990, yet per capita GDP has increased only 8-fold. Welfare schemes can temporarily reduce distress, but only enterprises can create sustainable upward mobility. 

Why do communist and socialist ideas still appeal to sections of Indian intellectuals despite the repeated global failures of command economies?

MS: Because socialism is emotionally seductive. Markets look messy; governments look orderly. Intellectuals often underestimate incentives. Human beings are not angels waiting for central planning instructions. They respond to ownership, aspiration, mobility and rewards. Also, capitalism is noisy because freedom is noisy. Democracies and markets produce inequality, excess, failure, speculation and social tension. Command economies temporarily hide these tensions through coercion and control, but inefficiency eventually catches up. The key is being idealists without illusions.

History is fairly clear. The Soviet Union collapsed. Maoist China abandoned orthodox communism and embraced markets. Vietnam liberalised. Even Cuba quietly tolerates private activity today. There are very few examples of durable prosperity without markets. But we should also avoid caricaturing criticism of capitalism. Markets are incredibly powerful but not self-sufficient. They need regulation, the rule of law, property rights, public health, education and competition policy. Productive capitalism requires capable states, not absent states. The real debate should not be markets versus government. The real question is: what should markets do and what should governments do? Confusing those roles creates both crony capitalism and bureaucratic paralysis.

What, in your view, is the difference between productive capitalism and crony capitalism in India?

MS: Productive capitalism competes in markets. Crony capitalism competes for government proximity. One creates productivity; the other extracts rents. One wants customers; the other wants licences. One fears competitors; the other cultivates regulators. Historically, India suffered from excessive discretionary regulation. Whenever approvals become opaque, relationships become economically valuable. Complex regulation is a fertiliser for cronyism.

The solution is not less capitalism. The solution is more competition, simpler rules, transparent taxation, predictable regulation and faster judicial enforcement. The best entrepreneurs want less dependence on the state, not more. They want stable policy, efficient infrastructure, enforceable contracts and minimal friction. Crony capitalism also damages social legitimacy. Citizens begin to believe success comes from connections rather than competence. That’s extremely dangerous in a young democracy. Trust in markets depends on the fairness of opportunity.

Do you think India has developed a distinctly Indian model of capitalism shaped by family structures, social obligations and scarcity?

MS: Definitely. Indian capitalism is deeply shaped by family structures, social networks and historical scarcity. Western capitalism evolved in societies with stronger institutions and formal systems. Indian capitalism evolved in an environment where institutions were often weak, so trust migrated toward families, communities and relationships. That’s why Indian business groups tend to think generationally. Many promoters are willing to sacrifice short-term profitability for long-term continuity. Western quarterly capitalism sometimes underestimates the value of stewardship and patience.

Scarcity also made Indian entrepreneurs unusually adaptive. If you can build a company in India — dealing with infrastructure gaps, regulatory complexity and fragmented markets — global volatility feels less intimidating. Indian managers are often excellent in chaotic environments because they grew up professionally inside chaos. Of course, family capitalism has risks too – succession disputes, governance issues, emotional decision-making and concentration of power. But it also creates unusual resilience and loyalty. The next transition for India is important. We need to preserve entrepreneurial hunger while improving institutional governance. The future belongs to companies that combine promoter vision with professional management.

AKT: You’ve consistently argued that India’s biggest challenge is employment. Are policymakers treating the jobs crisis with enough urgency?

MS: Not sufficiently, because India still discusses jobs emotionally rather than structurally. We treat unemployment as a monthly statistic rather than as a long-term productivity challenge. India’s real problem is not simply unemployment; it is underemployment and informality. Nearly 45% of Indians still depend on agriculture, yet it contributes barely 15–16% of GDP. That gap tells you millions of people are trapped in low-productivity work. The only sustainable poverty alleviation programme is non-farm formal employment. Not temporary subsidies. Not loan waivers. Not perpetual welfare expansion. Productive jobs.

India needs to create roughly 10–12 million jobs annually just to absorb new entrants to the labour market. But we have glorified startups while underinvesting in labour-intensive manufacturing, urbanisation, logistics, tourism, construction, healthcare and retail productivity. I keep saying this: the best social security scheme is a pay slip. A formal job changes everything, credit access, healthcare, mobility, dignity, women’s workforce participation, pension inclusion and intergenerational aspiration.

India also needs to stop treating employers as suspects. If hiring someone feels legally risky, employers hire fewer people. Labour reform is not anti-worker; it is pro-job. Our challenge is not a lack of talent; it's a shortage of scalable, productive enterprises.

Can sectors like pharmaceuticals still create mass employment in the age of automation and AI?

MS: Yes, but the nature of employment will evolve. AI eliminates tasks more often than entire occupations. We survived mechanisation, ATMs, spreadsheets and computers; we’ll survive AI too. The real issue is the productivity transition. Countries become richer when workers move from low-productivity work to higher-productivity work. AI will accelerate that transition, not eliminate human relevance.

Pharma, for example, will continue to need scientists, plant operators, compliance professionals, clinical researchers, supply-chain specialists, biologics experts, data scientists, regulatory professionals, and sales talent. But their work will become more technology-assisted. India sometimes fears automation prematurely. Our bigger problem is actually low productivity. Many Indian firms still operate far below global productivity benchmarks. Automation, digitisation and AI can make Indian manufacturing more globally competitive, potentially expanding employment indirectly through exports and scale.

Also, ageing societies worldwide will dramatically increase healthcare demand. The pharmaceutical and healthcare economy is likely to expand substantially over the next three decades. India is uniquely positioned because we combine scientific talent with cost efficiency. The future workforce challenge is not job destruction; it is skill adaptation. Education systems must become faster, modular and lifelong.

What lessons can sectors like semiconductors, AI and biotechnology take from Lupin’s rise?

MS: Three big lessons.

First, compounding beats headlines. DBG made investments years before they became profitable. Modern India wants semiconductor ecosystems in five years, but industrial capability takes decades. Taiwan, Korea, and China all patiently built manufacturing ecosystems over generations. 

Second, quality standards are non-negotiable. National pride without technical excellence becomes slogan manufacturing. Pharma succeeded because Indian firms eventually met the toughest global regulatory standards. Semiconductors, biotech and AI infrastructure will require the same obsessive quality discipline.

Third, ecosystems matter more than isolated companies. Pharma succeeded because universities, chemists, regulators, entrepreneurs, global markets and manufacturing networks evolved together. No industry scales sustainably in isolation.

India also needs strategic patience. Silicon Valley has conditioned everybody to expect instant scale. But deep manufacturing and scientific ecosystems require patient capital, policy stability, infrastructure and talent pipelines. And there’s a cultural lesson. DBG’s generation respected engineering and manufacturing deeply. India sometimes over-glamorises finance and software while underestimating the importance of physical production capability. Rich countries eventually make sophisticated things.

How difficult is it for Indian family businesses to make the transition into professionally managed global corporations?

MS: Extremely difficult, because founders must eventually surrender control without surrendering values. That’s emotionally hard. The founder often sees the company as an extension of personal identity. The first generation says, 'This company is my life.' The second generation says, 'This company is our inheritance.' The third generation sometimes says, Where’s the liquidity event? 

Professionalisation requires governance, delegation, transparency and institutional humility. Many Indian promoters are brilliant entrepreneurs but reluctant institution builders. Building a company and building governance are different capabilities. India is currently undergoing a massive transition from promoter-driven capitalism to institution-driven capitalism. You can see this across banking, pharma, technology, manufacturing and retail. The companies that endure globally are usually those that combine entrepreneurial vision with professional systems. Infosys institutionalised governance early. Asian Paints built managerial depth. HDFC created a process discipline beyond personalities. The real test of a company is not whether it survives success. It is whether it survives succession.

The book keeps returning to patience and long-term thinking. Has corporate India become too obsessed with speed and quarterly performance?

MS: Yes. We are developing an unhealthy addiction to immediacy. India wants six-pack abs in six days and unicorns in six months. But institution-building is agricultural, not algorithmic. You sow, nurture, compound and wait. Factories, scientific capabilities, research ecosystems, brands and trust cannot be downloaded like apps. Public markets and social media have intensified short-termism. CEOs now manage not just businesses but also narratives. Every quarter becomes a theatre. But the tragedy of quarterly capitalism is that it often mistakes motion for progress.

DBG’s generation understood the virtues of delayed gratification instinctively because they grew up in a culture of scarcity. Today, abundance has reduced patience. The most enduring economic achievements emerge slowly and then suddenly. Whether it is manufacturing capability, scientific talent, governance credibility or export relationships — the rewards of patience are rarely visible in the beginning and overwhelmingly obvious in retrospect. India’s next phase of growth will depend less on rapid consumption and more on patient institution-building.

How do you see the moral imagination of Indian business leaders today compared with the Licence Raj generation?

MS: Today’s leaders are probably more globally sophisticated, technologically fluent and professionally managed. But the earlier generation had a rawer hunger because survival itself was uncertain. Licence Raj entrepreneurs had to fight the state before they fought competitors. That creates a very different psychological profile. Imagine building a company while dealing with import quotas, foreign exchange controls, inspector raj and endless approvals. That environment produced unusually resilient industrialists.

At the same time, younger founders are often more meritocratic, less hierarchical and more willing to embrace professional talent. India’s corporate culture today is far more open than it was forty years ago. What concerns me occasionally is the decline of institutional imagination. Some founders think scale alone creates significance. But societies remember institutions, not valuations. The best business leaders combine ambition with responsibility. They understand that companies are social institutions — employers, taxpayers, exporters, innovators and nation-builders simultaneously.

Has your understanding of inequality and labour changed over the years through your work in India’s employment ecosystem?

MS: Yes, substantially. I am convinced that inequality of opportunity matters more than inequality of outcomes. India’s deepest divide is not rich versus poor. It is formal versus informal. A worker in the informal economy lacks access to healthcare, social security, legal protection, skill mobility, and a predictable income. That vulnerability compounds across generations. A poor child without quality schooling, employable skills, English capability, mobility or networks is not participating meaningfully in capitalism. That’s why education reform, labour reform, urbanisation and women’s workforce participation matter enormously.

India also underestimates migration. Every successful country urbanised before it became rich. Cities are productivity machines because they connect people, firms, skills and capital. Working in employment has also made me less ideological and more practical. Labour markets are ultimately about dignity, aspiration and mobility. People do not want permanent dependence; they want opportunity.

On a personal level, what did writing this book leave you with?

MS: That entrepreneurship is finally an act of bravery. The first three words of the book are 'Veer Bhogya Vasundhara' – the brave shall inherit the earth because bravery is the hardest virtue to fake. Rational people should probably not become entrepreneurs because the odds are terrible. Most businesses fail. Regulation changes. Markets fluctuate. Competitors emerge. Capital dries up. Yet entrepreneurs continue building anyway. 

Society's progress depends on irrational optimists who refuse to give up. Writing the book also reinforced my belief in compounding. Human beings dramatically underestimate what persistence can achieve over thirty or forty years. DBG did not become significant because of one breakthrough moment. He became significant because he kept building through multiple decades of adversity. And personally, the project made me more respectful of manufacturing. India sometimes glamorises digital entrepreneurship while underestimating the complexity of building physical production ecosystems. Factories are civilisation in concrete form.

Finally, when future historians write the story of Indian capitalism, what do you think they’ll misunderstand most about this generation of entrepreneurs?

MS: They may underestimate how difficult India’s transition has actually been. India is simultaneously a rich country and a poor country; a digital superpower and a low-productivity economy; globally ambitious and administratively overregulated. Future historians may overstate entrepreneurship without understanding the sheer regulatory cholesterol Indian firms still navigate daily. Starting, operating, hiring, litigating, exporting or shutting businesses in India still involves enormous friction compared to many developed economies.

They may also underestimate how psychologically transformative liberalisation was. After 1991, we have tried to change our norms around aspiration, wealth creation and global ambition. That mental shift matters enormously. I also think historians will overfocus on technology startups and underappreciate sectors like pharma, manufacturing, logistics, financial services and infrastructure that quietly built India’s economic backbone. And they may misunderstand the sheer optimism required to build in India. Despite all our problems — infrastructure gaps, bureaucracy, legal delays, skilling deficits — entrepreneurs kept investing. That optimism itself is one of India’s greatest economic assets.

(Ashutosh Kumar Thakur writes extensively on the intersection of culture, economics and corporate history. He is a regular contributor to leading national publications.)