The ‘Make in India’ initiative, launched on September 25, 2014, to make India a global manufacturing hub, has completed a decade.
‘Make in India ‘initiative:
The campaign was launched to facilitate investment, promote innovation and skill development, protect intellectual property and create the best manufacturing infrastructure.
Objective:
Increase the growth rate of the manufacturing sector to 12-14% per annum.
Creation of 100 million additional manufacturing jobs by 2022 (revised date 2025).
Increase the contribution of the manufacturing sector to 25% of GDP by 2025.
Pillars of ‘Make in India’:
The new processes:
Under this, measures were implemented to improve the business environment for startups and established enterprises with ‘ease of doing business’ being considered important for entrepreneurship.
New Infrastructure:
The Government gave priority to the development of industrial corridors and smart cities to create world class infrastructure.
It also promoted innovation and research through streamlined registration systems and improved Intellectual Property Rights (IPR) infrastructure.
The new area:
Foreign direct investment (FDI) was facilitated in various sectors including defence production, insurance, medical devices, manufacturing and railway infrastructure.
New mindset:
Under this, the government played the role of a facilitator rather than a regulator and promoted partnerships with industries to accelerate the economic growth of the country.
Make in India 2.0:
The ongoing “Make in India 2.0” phase (comprising 27 sectors) is strengthening India’s role as a key player in the global manufacturing sector with the furtherance of this programme.
Made in China 2025:
The initiative aims to transform China’s economy from a low-cost manufacturing base to a producer of high-value products and services.
The objectives of this programme are:
Increase the share of domestically sourced staples from 40% in 2020 to 70% in 2025.
Achieving technological breakthroughs in 10 key areas, including semiconductors, aerospace and robotics.
Reduce energy and resource consumption.
Develop globally competitive firms and industrial hubs.
Key steps taken to enable Make in India:
Production Linked Incentive (PLI) Schemes:
The PLI schemes are aimed at boosting domestic manufacturing and exports by covering 14 key sectors.
Progress till July 2024: About 8 lakh jobs created with total investment reaching Rs. 1.23 lakh crore.
PM GatiShakti:
It was launched with an aim to achieve a US $5 trillion economy by the year 2025.
The initiative focuses on setting up multimodal and last-mile connectivity infrastructure to boost economic growth.
The initiative is based on seven primary drivers: Railways, roads, ports, waterways, airports, mass transport and logistics infrastructure.
Semiconductor ecosystem development:
The Semicon India programme was approved in 2021 to develop a sustainable semiconductor and display ecosystem.
National Logistics Policy (NLP):
It was launched to boost India’s logistics sector through advanced technology, better processes and skilled manpower.
The goals are to reduce logistics costs, improve India’s Logistics Performance Index (LPI) ranking to top 25 by 2030, and develop a data-driven decision support system.
Industrialization and Urbanization:
The National Industrial Corridor Development Programme is India’s flagship infrastructure initiative aimed at developing “smart cities” and advanced industrial hubs.
Startup India:
It was launched to support entrepreneurs, build a strong startup ecosystem and transform India into a job-creating nation instead of jobseekers.
As of September 2024, India has the third largest startup ecosystem globally with 148,931 DPIIT recognized startups, through which more than 15.5 lakh direct jobs have been created.
Tax Reforms:
The Goods and Services Tax (GST) is an important reform in India’s tax system.
Unified Payment Interface:
UPI has a share of 46% in real-time payments globally, highlighting its key role in digital finance.
About Rs 81 lakh crore worth of transactions were facilitated by UPI from April to July 2024, which reflects its growing consumer confidence.
Key achievements under Make in India:
Global Supply of Vaccination:
India played the role of a leading exporter by supplying nearly 60% of vaccines globally with achieving record COVID-19 vaccination coverage with the help of indigenous vaccines.
Vande Bharat trains:
It is India’s first indigenous semi-high-speed train which is an example of ‘Make in India’ initiative.
At present, 102 services (51 trains) are demonstrating the progress in rail technology with enhanced connectivity.
Achievements of Defence Production:
The commissioning of India’s first indigenously built aircraft carrier INS Vikrant is a symbol of progress towards self-reliance in defence.
Exports to more than 90 countries with defence production reaching Rs. 1.27 lakh crore in 2023-24.
Growth in Electronics Sector:
India’s electronics sector has expanded to US $155 billion by FY23 with production almost doubling from FY17. Mobile phones account for 43% of this production, making India the second largest mobile manufacturer globally.
Exports:
Merchandise: In FY 2023-24, their exports reached US $437.06 billion.
Shoes for the defense sector: ‘Made in Bihar ‘shoes have been inducted into the Russian Army.
Kashmir willow bats: These bats have gained international popularity, reflecting India’s craftsmanship and influence in cricket.
Amul expands internationally: Amul has launched its dairy products in the US, underlining the global importance of Indian dairy.
Employment in the textile industry: About 14.5 crore jobs have been created in the textile sector.
The production of toys: About 400 million toys are produced in India every year and 10 new toys are manufactured every second.
Challenges related to Make in India programme:
Global Manufacturing Index:
As of 2023, India has been ranked 5th in the Global Manufacturing Index (behind countries like China and USA), highlighting the need for competitiveness.
Manufacturing’s contribution to GDP:
Manufacturing sector contributed only about 17% to India’s GDP in FY 2022-23, highlighting the need for policies that stimulate growth in the sector.
However, substantial improvements are required to reach the target of 25% contribution by 2025.
Lack of skill development:
The India Skills Report, 2024 reveals that nearly 60% of India’s workforce lacks relevant skills for manufacturing employment, hampering the potential growth of the sector.
Challenges in the supply chain:
The COVID-19 pandemic has exposed the vulnerabilities of global supply chains, impacting India’s manufacturing landscape.
A shift towards localisation of supply chains is necessary but it is still underdeveloped.
The investment objectives:
The government has set a target of attracting US $100 billion investment in the manufacturing sector by 2025.
By 2023, only US $23 billion of investment has been achieved, highlighting the gap between the goal and reality.
Innovation and R & D:
India’s R & D expenditure to GDP ratio is 0.7%, which is much lower than that of major economies and well below the global average (1.8%).
Solution:
The simplification of regulations:
Bureaucratic procedures and labour laws should be simplified to create a business-friendly environment.
For example, in India, the four labour codes passed in 2019 and 2020 have not yet been implemented.
Investments in infrastructure:
Transport networks and logistics systems should be upgraded to improve manufacturing efficiency.
Skill Development Programmes:
Targeted skill development initiatives should be implemented to address the skill gaps in the workforce.
In countries like South Korea, where 90% of the population is skilled, India must take initiatives as per the requirement of the industry.
Encouraging investment in R & D:
Innovation should be promoted by increasing investment in R & D including tax incentives.
Promoting Local Supply Chains:
Domestic supply chains should be strengthened to reduce dependence on imports and increase adaptation.
Promoting trade relations with foreign countries:
Trade relations should be promoted to attract foreign investment and facilitate technology transfer.
The Economic Survey for 2023-24 shows that India can benefit from investments from China by attracting FDI from China.
Monitoring and Evaluation:
Establish a framework for monitoring the impact of the initiatives taken along with identifying the related constraints and areas of improvement.
