Make in India is a major initiative launched by the Government of India on 25th September 2014, aimed at transforming India into a global hub for manufacturing, innovation, and investment. The primary goal of this program is to boost India’s manufacturing sector, attract foreign direct investment (FDI), and increase the contribution of manufacturing to India’s GDP, ultimately creating jobs and fostering economic growth.
Objectives of Make in India:
- Job Creation: One of the primary objectives is to generate employment opportunities by promoting industrialization and expanding the manufacturing sector.
- Increase Manufacturing’s Share of GDP: The aim is to raise the contribution of manufacturing from 16-18% of GDP (at the time of the launch) to 25% by 2025.
- Attract Foreign Direct Investment (FDI): The initiative aims to create an investor-friendly environment by improving ease of doing business and offering incentives to foreign companies.
- Reduce Import Dependence: By increasing domestic production capacity, India seeks to reduce its reliance on imports, especially in key sectors such as electronics, defense, and heavy machinery.
- Enhance Skill Development: By promoting industries, the initiative aims to improve the skill set of the labor force through technical training programs, which are crucial for a thriving manufacturing sector.
Key Features of Make in India:
- Sectoral Focus: The initiative focuses on 25 key sectors, including automobiles, defense manufacturing, aviation, pharmaceuticals, textiles, electronics, information technology (IT), renewable energy, mining, chemicals, and food processing.
- Ease of Doing Business: India has made significant strides in simplifying regulations, improving government-business interactions, and reducing red tape to encourage both domestic and foreign companies to invest in the manufacturing sector. Key measures include the simplification of company registration, faster environmental clearances, and a single-window system for approvals.
- FDI Reforms: The government has relaxed foreign direct investment (FDI) norms across several sectors. 100% FDI is allowed in most sectors, including defense, railways, pharmaceuticals, civil aviation, and telecommunication, under automatic routes or with minimal government approval.
- Incentives and Subsidies: Various schemes have been launched to incentivize domestic manufacturing, such as Production Linked Incentive (PLI) schemes. These schemes offer financial incentives to companies that meet certain production targets, particularly in sectors like electronics, pharmaceuticals, and automobiles.
- Skill Development: The government has also focused on skill development programs, such as the Skill India initiative, to train the workforce for employment in the manufacturing sector.
Achievements of Make in India:
- Increase in FDI Inflows:
- Since the launch of the initiative, FDI inflows into India have surged. In 2020-2021, India recorded its highest-ever annual FDI inflow of $81.72 billion, reflecting confidence from global investors.
- Several major global companies, including Apple, Samsung, Foxconn, Hyundai, Toyota, Amazon, and Walmart, have expanded their manufacturing operations in India.
- Growth in Key Sectors:
- Automobile Manufacturing: India has become one of the largest automobile manufacturers in the world. Companies like Maruti Suzuki, Hyundai, Tata Motors, and Mahindra & Mahindra have scaled their production, and global giants like Ford, Honda, and Volkswagen have established manufacturing bases in India.
- Electronics Manufacturing: India’s electronics manufacturing sector, particularly mobile phone production, has seen exponential growth. The country has become the second-largest mobile phone manufacturer in the world, with companies like Samsung, Xiaomi, and Apple assembling phones in India.
- Defense Manufacturing: The government has opened up the defense sector for private players and foreign investment. Domestic companies like Bharat Forge, in collaboration with global defense firms, have started manufacturing defense equipment in India. India also aims to become a major exporter of defense products.
- Infrastructure Development:
- To support the manufacturing sector, large-scale infrastructure projects have been undertaken, including industrial corridors, smart cities, and the upgrading of ports and airports.
- The Delhi-Mumbai Industrial Corridor (DMIC) is a notable project that provides world-class infrastructure for manufacturing companies, further boosting the objectives of Make in India.
- Improved Ranking in Ease of Doing Business:
- India’s ranking in the World Bank’s Ease of Doing Business Index improved significantly after the launch of the initiative, moving from 142nd place in 2014 to 63rd in 2020. This reflects the impact of government reforms aimed at reducing bureaucracy and improving business regulations.
Key Schemes Under Make in India:
- Production Linked Incentive (PLI) Scheme:
- Introduced to boost domestic manufacturing by providing financial incentives to manufacturers that meet production targets. The scheme covers sectors like electronics, pharmaceuticals, automobiles, medical devices, solar modules, and telecom equipment.
- For example, the PLI scheme for mobile phone manufacturers offers incentives based on incremental sales, leading to significant investments by companies like Apple (through Foxconn and Wistron) and Samsung.
- Smart Cities Mission:
- This is aimed at building 100 smart cities with state-of-the-art infrastructure, technology, and services to support urbanization and provide efficient, sustainable living conditions for people working in industrial areas.
- National Manufacturing Policy:
- The government launched the National Manufacturing Policy (NMP) to increase the share of manufacturing in GDP and to create 100 million jobs by 2022. This policy focuses on creating industrial zones with infrastructure that supports industries and reducing procedural bottlenecks for manufacturing companies.
- Skill India:
- A complementary initiative aimed at improving the skill set of the Indian workforce, ensuring a supply of skilled labor to meet the demands of the manufacturing sector. Training programs and vocational education are offered to young Indians, particularly in areas related to manufacturing and technology.
Challenges and Criticisms of Make in India:
- Slow Progress in Some Sectors:
- While sectors like electronics and automobiles have thrived under the Make in India initiative, others such as defense manufacturing and solar energy have not met expected targets. In defense, for example, despite increased FDI, India’s domestic manufacturing capacity is still developing, and the country continues to rely heavily on imports.
- Skill Mismatch:
- Although there is a strong focus on skill development, the manufacturing sector still faces a gap between the skills required by industries and the skills possessed by the workforce. Many industries report difficulties in finding workers with adequate training in high-tech and advanced manufacturing fields.
- Infrastructure Bottlenecks:
- While improvements in infrastructure have been made, certain areas such as power supply, logistics, and transportation infrastructure remain bottlenecks. Delays in land acquisition, regulatory approvals, and project execution have hampered industrial growth in some regions.
- Dependence on Imports for Critical Inputs:
- Despite the push for domestic manufacturing, India remains dependent on imports for critical components and raw materials, especially in sectors like electronics and pharmaceuticals. For instance, the majority of mobile phone components are still imported from countries like China, which impacts the “self-reliance” aspect of the initiative.
- Global Economic Challenges:
- Global factors like trade tensions (e.g., US-China trade war), the COVID-19 pandemic, and shifts in global supply chains have presented challenges to India’s manufacturing sector. The pandemic, in particular, disrupted supply chains and delayed the implementation of many Make in India projects.
Example of Make in India: The Mobile Phone Industry
The mobile phone manufacturing sector in India serves as one of the most successful examples of the Make in India initiative.
Pre-Make in India Scenario:
- Before 2014, most mobile phones sold in India were imported, with little domestic manufacturing capacity. India was highly dependent on imports, primarily from China, for its mobile phone needs.
Post-Make in India Impact:
- Growth of Domestic Manufacturing:
- After the launch of Make in India, the government introduced several initiatives and incentives, such as the PLI scheme for electronics manufacturing, to attract global phone manufacturers to set up plants in India.
- Major global companies like Samsung, Xiaomi, Oppo, Vivo, and Apple started assembling phones in India. As a result, India became the second-largest mobile phone manufacturer in the world by 2018.
- Job Creation:
- The mobile phone manufacturing sector has created thousands of jobs, both directly in factories and indirectly in related industries like logistics and component manufacturing.
- Reduced Import Dependence:
- India’s mobile phone imports have significantly declined, with more than 90% of mobile phones now manufactured domestically. This has reduced India’s import bill and boosted its export potential.
- Export Growth:
- India has begun exporting mobile phones to other countries, especially in the Middle East and Africa, showcasing the success of the Make in India initiative in transforming the country into a manufacturing hub for global products.
Conclusion:
The Make in India initiative has played a crucial role in transforming India’s manufacturing sector and positioning it as a global manufacturing destination. The program has led to an increase in FDI, industrial output, and job creation across key sectors like electronics, automobiles, and defense.
