Policy Update
Riya Singh
Background
The Make in India campaign is a paradigm change in the Indian economic policy that was launched by the Prime Minister, Narendra Modi, in September 2014. It was at this very critical juncture when the world was doubting whether India could sustain its high population birth rates, and at the same time keep up with the economic development process.The idea was to make India a global manufacturing hub, moving the government position to being a regulator rather than an active facilitator- adopt the philosophy of minimum government, maximum governance.
The policy was set with three major goals that were to be met:
- Develop trust in the potential of India in the eyes of international investors, national business people and citizens.
- Offer systematic framework and technical data of 25 of recognizable sectors.
- Connect with local and international audiences by maintaining constant contact and sharing information regarding reforms and opportunities.
Make in India was basically aimed at attracting investment, encouraging innovation, developing the skills of people, and building world-class infrastructure. It was also a representation of the initial Indian step towards the vision that the country was to be viewed as Vocal-for-local, that is; making domestic industries stronger and raising the profile of Indian industries on the global stage.
Functioning
The campaign cuts across various industries of manufacturing and services. The major sectors that are manufactured are aerospace and defence, automobiles and auto parts, pharmaceuticals, biotechnology and capital goods. In services, information technology (IT & ITeS), tourism and hospitality, medical value travel, logistics and financial services are included.
To make the investor engagement easier, Investor Facilitation Cell (IFC) was introduced to offer single window assistance in regards to approvals, guidance and aftercare in order to entice such countries to invest.Special platforms such as Japan Plus and Korea Plus were launched to support and attract investment from such nations. They also held workshops along with the World Bank and other partners to build investor confidence and share best practices.
The four pillars used to create the program are:
- New Infrastructure: Modern industrial India was based on the construction of industrial zones, smart cities, and high-speed systems of communication. The aspect of skill development and research support was also included in the form of enhanced IPR systems and procedures rendered easy.
- New Processes: Make in India made the simplification of the business environment the key core of the initiative. Entrepreneurship and start-ups were fuelled by reforms on how to make Ease of Doing Business better through online registration, quicker clearances and fewer regulatory obstacles.
- New Sectors: The Government came up with 25 priority sectors where growth was targeted and opened up FDI standards in such industries like defence, construction and railways.
- New Mindset: The government was traditionally seen as a regulator, but it was re-established as a partner in economic development and not a controller.
Performance
Make in India created a strong digital environment, such as an extensive website and a mobile application, under the Department for Promotion of Industry and Internal Trade (DPIIT), serving millions of users. The regulatory regulations were redesigned to enable increased foreign involvement.
Major infrastructure developments are being undertaken such as six major industrial corridors, which are Delhi-Mumbai, Chennai-Bengaluru, Bengaluru-Mumbai, Vizag-Chennai, Amritsar-Kolkata, and East Coast Corridors, which have 21 planned industrial cities.
The Sagarmala project, one of the complementary projects, is to modernize ports and inland waterways, whereas the modernization of railways and high speed rail projects enhanced connectivity and logistics. The larger policy has also incorporated aviation infrastructure and smart city development.
One of the signs of success has been a steady increase in Foreign Direct Investment (FDI) inflows, namely, US$ 45.14 billion in 2014-15 to US$ 70.95 billion in 2023-24, which indicates that investors are now confident in the growth trend of India.
Impact
Make in India has provided greater transparency, investments, innovation and strengthening of the infrastructure in manufacturing by India and can be measured through several results:
India is a world favorite investment destination. It continues to be one of the fastest growing key economies globally. The country improved on the World Bank in the Ease of Doing Business and Global Competitiveness Index. The brand value of India in the world also rose to the seventh level.
Several real outcomes specify the successes of the program:
- Public Health: India came out as a large-scale supplier of vaccines during the COVID-19 pandemic and even sold the life-saving injections to other nations worldwide.
- Railways: The introduction of Vande Bharat Trains, the first semi-high-speed trains in India designed indigenously, is one step towards the manufacturing industry in India.
- Electronics: This industry has increased output also by a margin of USD 48 billion to USD 101 billion in FY17 and FY23 whereby 99 percent of its mobile phones are produced within India making it the second-largest mobile phone manufacturing company in the world.
- Textiles and Employment: The textile Industry generated more than 14.5 crore employment which reinforced the economies of the rural and semi-urban areas.
- Defence and Aviation: Dollies have been struck with international giants such as Alstom, GE, Airbus, and Pratt and Whitney that have led the way to domestic manufacturing and research and development partnerships.
Emerging Issues
Even with this significant improvement, Make in India has not succeeded in its main objective completely. It was also to reach 25 percent of the GDP manufacturing sector, although this has yet to reach 15.9 percent by 2022-24 (which was 16.7 percent in 2013-14).
Acquisition of land through the complex process of land acquisition, disparities in implementing the reforms across the states, and bureaucracy against MSMEs are the major challenges that remain to be overcome. The global disruptions, such as trade tensions and geopolitical shifts, and the COVID-19 pandemic had an impact on the supply chains and the investor sentiment.
Way Forward
As Make in India enters its second decade of operation, it will have to be current with the changes in technology and the environment. The next step is to be oriented on sustainable production, on environmentally friendly technologies, and on digitalization.
Renewable energy, electric mobility, and green hydrogen development in India provides a chance to establish the country as a clean manufacturing center on the global level. At the same time, the adoption of Industry 4.0 technologies, such as automation, AI, robotics, and IoT, would help to increase the productivity of the industry and ensure global competitiveness.Research and development (R&D) alongside the upgrading of human capital is required to ensure that the difference between the potential of the industry and human capital preparedness is bridged.
Conclusion
Make in India has essentially transformed the industrial and economic environment in India over these years. Though it has also had its structural and external issues, the initiative has provided a solid platform of a self-reliant, innovation-based, and globalized economy.
The key to success in the long run will depend on its reform, technological development, and inclusive development. In India, as the country is entering its next step of growth, Make in India is not just an economic plan; it is also the national vision with its core pillars being resilience, sustainability and global leadership.
References
About the Contributor: Riya Singh is a Research Intern at IMPRI. She is a student of the Master of Arts in Public Policy and Governance at the Tata Institute of Social Science, Hyderabad and holds a bachelor’s degree in Political Science from the University of Delhi. Her research interests lie in government policy and data analysis.
Acknowledgement: The author sincerely thanks Ms. Aasthaba Jadeja, Ms. Bhaktiba Jadeja and the IMPRI team for their valuable support.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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