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The Make in India programme has been completed for 10 years.
It commits to achieve for the country an increase in manufacturing sector growth to 12-14 % per annum over the medium term.
It targets to increase the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
It also aims to create 100 million additional jobs by 2022 in the manufacturing sector alone.
The “Make in India” initiative is based on four pillars, which have been identified to give a boost to entrepreneurship in India, not only in manufacturing but also in other sectors.
‘Make in India’ recognizes ‘ease of doing business’ as the single most important factor in promoting entrepreneurship.
A number of initiatives have already been undertaken to ease the business environment.
The aim is to de-license and de-regulate the industry during the entire life
cycle of a business.
The government intends to develop industrial corridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements.
Existing infrastructure to be strengthened through upgradation of infrastructure in industrial clusters. Innovation and research activities are supported through a fast-paced registration system and accordingly infrastructure of the Intellectual Property Rights registration setup has been upgraded.
‘Make in India’ has identified 25 sectors in manufacturing, infrastructure and service activities and detailed information is being shared through interactive web-portal and professionally developed brochures.
FDI has been opened up in Defence Production, Construction and Railway infrastructure in a big way.
The industry is accustomed to seeing the Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how the Government interacts with industry.
The Government will partner with industry in the economic development of the country. The approach will be that of a facilitator and not a regulator.
The Indian government prioritises 25 sectors under the 'Make in India' initiative to attract foreign direct investment (FDI) and promote domestic manufacturing.
These sectors are key to positioning India as a premier destination for global investment. With a focus on sectors ranging from automobiles to biotechnology, and from IT to tourism, the initiative aims to leverage India's democratic environment and manufacturing prowess.
As of 2023, the initiative has facilitated the approval of over 240,000 investment proposals, attracting over $75 billion in Foreign Direct Investment (FDI).
Various sectors have witnessed significant growth under the initiative, with the automobile sector growing at an average annual rate of 7.9%, and the electronics sector at 27.3% from 2033–23.
The initiative has also led to a notable increase in the ease of doing business in India, with the country's ranking in the World Bank's Ease of Doing Business Index improving from 142 in 2014 to 63 in 2020.
It has contributed to India's emergence as one of the world's fastest-growing economies, with GDP growth averaging around 7% annually in recent years.
Under the Make in India initiative, several schemes have been implemented to support and promote manufacturing growth across various sectors.
It was introduced to boost domestic manufacturing in sectors such as electronics, pharmaceuticals, and automobiles by providing financial incentives based on incremental production.
It aims to enhance the competitiveness of manufacturing industries through various interventions such as technology upgradation, skill development, and access to finance.
It focuses on enhancing the skillsets of the workforce to meet the evolving demands of the manufacturing sector and promote entrepreneurship.
It was designed to nurture and support startups, fostering innovation and entrepreneurship in various manufacturing-related fields.
It is a national investment promotion and facilitation agency that assists investors in setting up and doing business in India, providing information, guidance, and handholding support.
It aims to transform India into a digitally empowered society and knowledge economy, facilitating the adoption of digital technologies in manufacturing processes and operations.
It seeks to develop 100 smart cities across India with modern infrastructure and amenities, fostering sustainable urban development and attracting investment in manufacturing and related industries.
Despite its progress, the Make in India initiative faces several challenges that hinder its full potential. Here are some key challenges:
Complex regulatory environments and bureaucratic hurdles in India increase compliance costs and deter investment. According to a survey by the Confederation of Indian Industry (CII) in 2023, 54% of businesses cited regulatory challenges as a significant barrier to investment.
Inadequate infrastructure, including power shortages, poor transportation networks, and limited access to finance, constrain manufacturing operations. The World Economic Forum’s
Global Competitiveness Report (2023) highlighted infrastructure quality, highlighting power shortages and poor transport networks.
Skill shortages and mismatches, particularly in technical and managerial roles, affect productivity and innovation in the manufacturing sector. A 2022 report by the National Skill Development Corporation (NSDC) indicated that 60% of manufacturing firms struggle to find skilled labour, particularly in technical and managerial roles.
Competition from other manufacturing hubs such as China and Vietnam, with lower production costs and more developed infrastructure restricts progress. A 2023 McKinsey report found that labour costs in Vietnam are approximately 25% lower than in India, making it more attractive for foreign investment.
The lack of effective enforcement of intellectual property rights in India discourages innovation and technology transfer.
Uncertainty in policies and regulations leads to investment delays and reluctance among investors.
Geopolitical tensions and global economic uncertainties such as Russia Russia-Ukraine War, the Gaza war, Sanctions on Iran, etc. affect the trade and investment flows, impacting manufacturing growth and expansion. The International Monetary Fund (IMF) projected that geopolitical tensions, including the Russia-Ukraine war, could reduce India’s GDP growth by up to 1.5% in 2024 due to disrupted supply chains.
Way aheadIndia should simplify its regulatory processes by adopting digital solutions and implementing a single-window clearance system.
By cutting down the time and resources spent to pass through the regulations, India can attract more foreign direct investment (FDI) and boost domestic manufacturing.
To address critical infrastructure deficits, India must prioritize investments in the transportation and energy sectors. Improving road, rail, and port connectivity will reduce logistics costs and improve supply chain efficiency.
Additionally, expanding access to reliable energy sources, particularly renewable energy, will support manufacturing operations and help ensure sustainability in production.
There is a pressing need to align the skills of the workforce with the requirements of the manufacturing sector. India should develop targeted skill development programs in partnership with industries and educational institutions.
These programs should focus on technical and managerial skills, ensuring that workers are well-equipped to meet the evolving demands of modern manufacturing, thereby improving productivity and innovation.
The government should implement incentives that encourage innovation and productivity improvements, particularly under initiatives like "Make in India."
This could include tax breaks, subsidies for technology adoption, and support for research and development. By fostering a more conducive environment for manufacturers, India can better compete with lower-cost manufacturing hubs such as China and Vietnam.
Effective enforcement of intellectual property rights (IPR) is crucial for fostering innovation and attracting foreign technology. India must enhance its IPR framework to ensure robust protection against infringement and streamline the patent approval process.
By building a stronger IPR regime, India can encourage domestic and foreign companies to invest in research and development, thus driving technological advancement and economic growth in the manufacturing sector
Important articles for reference:
Making India Manufacturing hub
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PRACTICE QUESTION Q.How far has the make in India been successful in achieving its targets in over a decade. Critically examine highlighting its success and challenges.( 250 words) |
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