Make in India is a flagship campaign steered by Prime Minister Modi with a vision to facilitate investments, nurture innovation, enhance skills, and protect intellectual property, and to develop a world class manufacturing ecosystem. The primary objective of this initiative is to attract investments from across the globe and build up a strong manufacturing infrastructure in India. Another objective of the project is to be able to utilize the existing Indian talent base and create more employment opportunities.
Make in India, this program facilitates and strives to rank high on the ‘Ease of Doing Business index’, by eliminating the unnecessary laws and regulations, making bureaucratic processes easier, making the government more transparent, responsive, and accountable.
Formally introduced on September 25, 2014, by Prime Minister Modi at Vigyan Bhawan, Make in India’ focused on 25 industrial sectors which included automobiles, automobile components, aviation, biotechnology, chemicals, construction, defense, and more.
Status of Manufacturing Sector
Performance of the manufacturing sector in India is a cause of concern. India’s potential of 25% value addition to GDP through manufacturing sector is currently underutilized. In developing economies manufacturing sector contributes by 25-40% in value added GDP. China, South Korea, Indonesia are a few examples. India has seen a considerably decelerating industrial sector recently. A few bottlenecks to these downscaled contributions can be attributed to:
High input costs
- Inadequate infrastructural framework
- Lack of single window clearance facilities
- Inadequate availability of land for industrial purposes
- Unstableprogress in the logistics sector
Make in India works through these bottlenecks with an aim to facilitate the industrial sector through the creation of an advantageous environment for manufacturing activities, improving industrial policies, and reforming labor laws. A few initiatives undertaken by government in this direction are:
- Union Budget 2014-15 was an inspiring move to this step. There were plans to establish 100 smart cities that would enhance industrialization.
- Applying for Industrial License & Industrial Entrepreneur Memorandum was made online on a 24×7 basis for the ease of applicants.
- Central Government Departments & Ministries is integrated at a single window IT platform
- Online return filing has been introduced and all the compliances are placed at Ministry’s/ Department’s web portal
- There is a single electronic register for businesses
- De-licensing and deregulation measures have been taken to reduce complexity
- Industrial license is extended to three years,
- Environmental clearances are also available online.
- Industrial corridors like the Delhi-Mumbai corridor, Chennai-Bengaluru-Chitradurga, industrial corridor, Bangaluru-Mumbai Economic Corridor, etc. were launched.
- GST relaxed the procedures surrounding the tax system, its complications, and helped in reducing the production costs.
- Digitization has been promoted in a big way by the NDA government making the birth of the company and its survival seamless.
- There has been some increase in Foreign Direct Investments increasing the inflow of funds to facilitate India to be an open economy.
In this way government has brought together some common solutions for the ease of doing business in India. The above measures largely look at providing:
- Single window clearances
- Active harmonization between Centre and State offices
- Digitization of the concerned departments
- E-filing and electronic fulfillment of procedures
- Facilitating the approvals electronically.
- Opening up a number of sectors for FDI. The defense is one sector that has been liberalized largely in this direction.
Make in India Mission’s Success
Under the verge of these important reforms, India is self-assured to become Asia’s largest economy in the coming years. India has the Democracy, demography and demand to be able to live and survive this dream. The young, educated and tech-savvy population, skilled labors arekey factors that can make this mission successful.
From the initial industrialization phase to the liberalization process, India will soon be a great prospect for the world business to invest in. Indian manufacturing companies are among a few tough global competitors in their respective sectors.
COVID-19 pandemic situations have again breathed new life into the Make in India Mission. Since pandemic came with a monstrous disruption to businesses all around the world, a story in India was no different. Already struggling GDPs of India, now needs a bullseye vision to recover at a faster pace from the already depressed economy.
Since the pandemic hit, the world is looking at alternatives to reduce its trade dependence on China. Amongst the mistrust against the Chinese administration and the political fallout, India is taking steady, reasonable, and bold steps to attract companies that are searching for alternative dominions. While the Make in India Mission started boiling down after a few years of its launch, lately due to pandemic, The Atma Nirbhar Bharat Abhiyan has re-energized the efforts.
India improved considerably from 77th rank in 2019 to the rank of 63rd in 2020 in the Ease of Doing Business Index. From 142nd position in 2014 to the rank of 63 in 2020, India has come a long way and is one of the best performers on this ranking Index.
This is a true reflection of the government’s commitment to making India a global manufacturing hub. This will hugely attract domestic and foreign investments with all these reforms. India is looking at a rank below 50 in the next years to come but there is stiff competition to face from Vietnam, Thailand, Indonesia, and Bangladesh amongst others.
India’s big advances in the right route are slowly taking Indiatowards its positioning as a global manufacturing hub. The plans of 5 big industrial corridors with world-class infrastructure, high-speed rail and road transportation network, ports, modern airports, are a part of this drive. The Smart cities along these corridors address a major concern connecting infrastructural constraints.
India’s objective can certainly be achieved through sincere and sustained efforts, and with an eye firmly focused on the goals to be achieved.
Conclusion: Patience is the watchword
Investments in infrastructure have to be a constant feature for the development of physical infrastructure and digital connectivity. Industrial clusters and cities must be well connected for effective and reliable industrial eco-system. There are challenges like red tape, limited capacities of SME sectors.
Working on all these loopholes, gradually India can rise as the next global manufacturing hub. Swift government intervention through strong fiscal response in Covid times and capital insertion into the economy is necessary. The constant efforts of the government in cutting down delays in manufacturing projects and infrastructure are evident by now..
Going forward, if India emerges from covid crisis with least impacts, then India can be the destination of choice for the global manufacturing giants. Sectors like electronics, pharmaceuticals, computer hardware,automobile, medical devices, components and engineering products will see growth in manufacturing. Another advantage for India, in comparison to other economies, is that we have a very large domestic consumption base that can absorb a large part of our output. Most likely after pandemic our domestic consumption should bounce back sooner than exports.
So the future of Make in India is golden for every sector that is in focus. MNC’s can be seen setting up their units in India. Furthermore, China’s partial policies towards their domestic companies have diverted investments to India to some extent. The developments post covid seems to have favored Indian business economy.
Indian government’s objectives can be reached through sincere and constant struggles. The Make in India initiative is a long term goal and the benefits may not be evidently visible in immediate months. Once the infrastructure, plants and factories that are currently in progress starts to stream and starts to produce the goods they are designed to make, the Indian economy will boom. The fresh trends are favorable, giving room for optimism. There are naysayers but the, the Make in India initiative in long run is bound to help the country materialize as a global manufacturing hub.