The ‘Make in India’ initiative celebrated its 10th anniversary on 25th of September 2024 marking a decade of transformational growth for the Indian design and manufacturing ecosystem.
About The Make In India Initiative
- Launched: The Initiative was launched by Prime Minister Narendra Modi on September 25, 2014.
- Aim: To boost domestic manufacturing, foster innovation, enhance skill development, and facilitate foreign investment.
- Nodal Ministry: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
- Targets:
- To achieve a manufacturing sector growth rate to 12-14% annually.
- To create an additional 100 million manufacturing jobs in the economy by 2022.To Increase the manufacturing sector’s contribution to GDP to 25% by 2022 (later revised to 2025).
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- Make In India 2.0: It focuses on furthering sustainability, innovation, and self-reliance with strategic interventions in renewable energy, green technologies, and advanced manufacturing.
- Make In India 2.0 focuses on additional 27 sectors, which include 15 manufacturing sectors and 12 service sectors.
Pillars of Make In India:
- New Processes: It adopted new measure for entrepreneurship development like the ‘ease of doing business criteria to make it more conducive for startups and established enterprises alike
- New Infrastructure: Focused development of industrial corridors and smart cities with state-of-the-art technology and high-speed communication and improved intellectual property rights (IPR) infrastructure to create world-class infrastructure.
- New Sectors: Opening up of Foreign Direct Investment (FDI) in significant sectors like Defence Production and Railway infrastructure. Also easing FDI regulations in Insurance and Medical Devices, encouraging international investment and growth.
- New Mindset: The government embraced the role of a facilitator rather than a regulator to foster a collaborative environment supporting industrial growth and innovation.
Manufacturing Sector
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Service Sector
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| Aerospace and Defence |
Information Technology & Information Technology enabled Services (IT &ITeS) |
| Automotive and Auto Components |
Tourism and Hospitality Services |
| Pharmaceuticals and Medical Devices |
Medical Value Travel |
| Bio-Technology |
Transport and Logistics Services |
| Gems and Jewellery |
Financial Services |
| Food Processing |
Environmental Services |
| Leather & Footwear |
Construction and Related Engineering Services |
| Electronics System Design and Manufacturing (ESDM) |
Communication Services |
| Shipping |
Education Services |
| Railways |
Audio Visual Services |
| Construction |
Accounting and Finance Services |
| Capital Goods |
Legal Services |
| Textile and Apparels |
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| New and Renewable Energy |
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| Chemicals and Petrochemicals |
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10 years of Make In India: Achievements
- Foreign Direct Investment (FDI): India has registered an increase of 119% in FDI inflows in the (2014-24) period spanning 31 States and 57 sectors. The manufacturing sector saw an FDI inflow increase of 69% in the same period.
- India attracted $667.41 billion in FDI, representing nearly 67% of the total FDI received over the last 24 years between April 2014 and March 2024
- Production Linked Incentive (PLI) Scheme: The PLI Schemes have resulted in ₹1.32 lakh crore (USD 16 billion) in investments and a significant boost in manufacturing output of ₹10.90 lakh crore (USD 130 billion) as of June 2024. Over 8.5 lakh jobs have been created directly and indirectly due to the initiative.
- Exports & Employment: India’s merchandise exports surpassed USD 437 billion in FY 2023-24, while total employment in the manufacturing sector increased from 57 million in 2017-18 to 64.4 million in 2022-23.
- Digital Transactions: Unified Payment Interface surpass the world’s leading digital payments platforms scoring an impressive 46% of the global real-time payment transactions. UPI processed nearly ₹81 lakh crore in transactions between April and July 2024 alone.
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$35 Tn economy & Make in India
- India is aiming to be a $35 trillion economy by 2047, as suggested by NITI Aayog’s CEO Amitabh Kant, during a session at the Mumbai Tech Week (MTW)
- He further added that, by 2047 ie. 100th anniversary of our independence, India need a consistent growth rate of 9-10% over the next three decades to become the second-largest economy.
- Steps to be Taken:
- Technology led Growth: There is a need to adopt new thinking, processes and technologies in the manufacturers sector.
- Digitalisation: India is leading in this area and has achieved digital identification for 1.4 billion people through Aadhar, enabled digital transactions through UPI, and financial Inclusion through JAM trinity.
- Entrepreneurial Culture: Through programmes like the Start-up India and Hackathons and Make In India have instilled an entrepreneurial culture in the country’s youth generating employment and growth.
- Social Development: Investment in human sectors like education, skills, and health will contribute in a healthy and motivated workforce
- Logistics: The Indian economies competitiveness could significantly be enhanced only by building an efficient logistics network with both backend and front end support.
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- Semiconductor Ecosystem: Currently five proposals are in pipeline with a total combined investment nearing Rs 1.52 lakh crores. Examples: A major project with Micron was sanctioned for nearly Rs 22,000 crores and Tata’s joint venture with Taiwan’s Powerchip in Dholera.
- Startups: The recognised startups have increased to 1,40,803 as on 30th June 2024, which have created over 15.5 lakh direct jobs.
- Ease of Doing Business: India’s rank has improved from 142nd rank in 2014 to 63rd rank in 2019 in the World Bank’s Doing Business Report.
- Procedural Simplification: The Jan Vishwas (Amendment of Provisions) Act, 2023 has decriminalised 183 provisions across 42 Central Acts. Also overall, 42,000 compliances have been reduced, and 3,700 provisions has been decriminalised
- Medical Growth: India supplies nearly 60% of the world’s vaccines and other life saving drugs, rightly named as the Pharma of the world.
- Atmanirbhar in Defence: In 2023-24, defence production soared to ₹1.27 lakh crore, with exports reaching over 90 countries. Defence exports soared from Rs 1,000 crore to Rs 21,000 crore. Also India launched INS Vikrant, the country’s first domestically made aircraft carrier.
- Mobile Manufacturing: Mobile phones constitute 43% of total electronics production in India, making it the second-largest mobile manufacturer in the world.
- The electronics sector overall grew to USD 155 billion in FY23 with production nearly doubling from USD 48 billion in FY17 to USD 101 billion in FY23.
- The Textile Industry: It has created a staggering 14.5 crore jobs across the country, significantly contributing to India’s employment landscape
- Toys: Exports of toys have zoomed 239% over the past 10 years and produces an impressive 400 million toys annually, with 10 new toys being created every second.
- State level initiatives: Several Indian states have also launched their localised initiatives like Tamil Nadu Global Investors Meet, Make in Odisha, Vibrant Gujarat, Happening Haryana, and Magnetic Maharashtra.
Contribution of Skill India in make in India
Skill India Mission was launched in 2015 with the goal to train over 400 million people in various skills by 2022 and provide them with employment opportunities.
- Provide Key Skills: Skills acquired through apprenticeship training (provide post-education job training to graduates/diploma holders) and Online skilling with the ‘e-Skill’ India portal linking B2C e-learning sites that operate digitally and build & source e-learning conte
- International Cooperation: Technical intern training programme (TITP) facilitates transfer of skills, technology and expertise among the participating countries and thus assists in developing human resources.
- The program provides opportunities to students for professional development courses in Japan’s industrial society for a set period (3-5 years).
- Skills of the Future: The mission emphasize on skilling in futuristic and new-age job roles related to Industry 4.0, Web 3.0, AI/ML, AR/VR, Drone Technology, etc with courses aligned with industry demand mapped in the district Skill Development Plan.
- Jan Shikshan Sansthan (JSS): It will also empower the underprivileged population (scheduled castes/scheduled tribes/minorities) by providing them with vocational training with minimum infrastructure and resources.
- Recognition of Prior Learning (RPL): Skill India recognizes prior learning, which helps individuals entering the workforce or starting businesses.
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Challenges Ahead
- Stagnant Manufacturing Sector: The share of value addition by manufacturing sector is 15.9 percent in 2023-24 compared to 16.7 percent of GDP (in constant price) in 2013-14. Also the target to increase manufacturing share of GDP to 25% seems a distant dream which is still at 15%.
- Increasing Unemployment: The target of adding 100 million manufacturing jobs is unmet, rather India reported a loss of 24 million jobs between 2016-17 and 2020-21, as per Ashoka University’s Centre for Economic Data and Analysis.
- Also India is experiencing one of its highest unemployment rates in decades.
- High Taxation: High incidence of taxation and high handedness in dealing with tax litigation cases is another headache.
- FDI as percentage of GDP: Even in terms of FDI, net FDI inflows have come down from 1.5 percent of GDP in 2013-14 to 0.8 percent in 2023-24.
- Tapping Global Opportunity: India has been unable to attract the global shift of labour intensive manufacturing units out of China in sectors like textiles, leather, electronics which has shifted to economies like Vietnam and Bangladesh.
- Focus on Capital Intensive Industries: The present industrial policy disproportionately focuses on the development of capital-intensive industries providing subsidies to selected large and medium-scale industries.
- Example: automobiles, pharma, advanced battery cells, telecom equipment, etc. despite having comparative advantages in labour-intensive manufacturing activities.
- Skilled Workforce Shortage: India is short of semi and High skilled workforce, although skill development programs are a part of the Make in India initiative with relative success of the vocational training and education programs
- Unsupporting Infrastructure: The lack of adequate infrastructure like transportation networks, power supply, and logistics is a significant growth inhibitor for the development of the overall economy.
- Quality and Standards: Indian food products are facing allegations of being of sub standard quality globally hampering their exports and India’s image.
- Example: Spice brands of Everest and MDH tested for harmful pesticide residue in singapore and european countries.
- Technological Backwardness: India has faced challenges in adopting and implementing advanced technologies in its manufacturing processes with a lack of access to cutting-edge technologies, limited research and development capabilities, and low technology penetration hindering its competitiveness .
- Focus on assembling rather than Manufacturing: Major focus industries under the Make in India scheme are restricted to the assembling of knocked-down kits despite many global companies having set up units in the country.
- Example: Mobile, telecommunication and electronics equipment manufacturing, etc.
Global Collaboration towards Make in India
- India-Japan: A $12 Bn ‘Japan-India Make-in-India Special Finance Facility’ fund was announced in 2015, to be managed by the Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC).
- Japan invested about $39.94 Bn in India in the (2000-2023) period, ranking fifth in FDI sources in sectors like automobiles, electrical equipment, telecommunications, chemicals, finance (insurance), and pharmaceuticals.
- India -Germany: ‘Make in India Mittelstand (MIIM), focusing on enhancing economic cooperation by encouraging small and medium-sized German companies to invest and manufacture in India was announced in 2015.
- The MIIM program, as of 2021 has supported more than 151 German Mittelstand companies, resulting in a total declared investment exceeding €1.4 Bn.
- India- Korea: Major Korean companies like Samsung, LG and Hyundai Motors have collectively invested over $4.4 Bn in India. Also there are over 600 large and small Korean firms operating in India such as POSCO (Steel Making), Lotte (Food Processing), and SsangYong Motors (Automotive) with a plan to enter or expand their presence in India.
Way Forward
- Policy Reforms and Regulatory Simplifications: India needs to overcome the regulatory and policy barriers by initiating policy reforms like the direct tax reform and further rationalising the GST regime and labour laws.
- Skills Training Programs: Unskilled and unemployable workforce is a persistent headache for India stalling its growth.
- The National Education Policy with its focus on vocational training initiatives, and industry-academia collaborations can bridge the skills gap and ensure a competent workforce.
- Raising Competitiveness: Indian manufacturers in order to compete on a global scale need to enhance their competitiveness via adoption of advanced technologies, improving product quality, and optimising manufacturing processes to meet international standards.
- Integration: ‘Make in India’ needs to be integrated with ‘assemble for the world’ following the Chinese example, where it integrated its domestic manufacturing industries with assembling units for global ‘network product’ companies.
- As per the economic Survey, this may create about 4 crore well-paid jobs by 2025 and about 8 crore by 2030.
- PLI for Labour Intersive Sectors: The PLI scheme needs to be expanded to include labour intensive sectors such as leather, garment, light engineering goods, toys, and footwear having maximum local value addition as the traditional manufacturing sector remains the most viable choice to create jobs for the masses.
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Key Initiatives under the Make In India Programme
- Startup India: The initiative launched on January 16, 2016 aims at supporting entrepreneurs, building a robust startup ecosystem, and transforming India into a country of job creators instead of job seekers.
- Production linked Incentive (PLI) Schemes: It was introduced in 2020 to boost the country’s manufacturing capabilities and exports covering 14 key sectors, to realise the vision of Atmanirbhar Bharat.
- Mobile Manufacturing and Specified Electronic Components; Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients; Manufacturing of Medical Devices; Automobiles and Auto Components; Pharmaceuticals Drugs; Specialty Steel; Telecom & Networking Product; Electronic/Technology Product; White Goods (Air Conditioners and LEDs); Food Products; Textile Products: MMF segment and technical textiles; High Efficiency Solar PV Modules; Advanced Chemistry Cell (ACC) Battery; Drones and Drone Components.
- PM GatiShakti: It aims to achieve a US $5 trillion economy by 2025 through the creation of multimodal and last-mile connectivity infrastructure through a ‘whole of the government’ approach by promoting planning and coordination among 36 Ministries/Departments
- The 7 Engines of Multimodal Growth: Railways; Roads; Ports; Waterways; Airports; Mass Transport; Logistics Infrastructure
- Approach: It is Clean Energy and Sabka Prayas ie. Central Government, the state governments, and the private sector coming together
- The Semicon India Programme: It focuses on the development of every segment of a sustainable semiconductor and display ecosystem to include packaging, display technologies, outsourced semiconductor assembly and testing (OSAT), sensors, fabrication plants (fabs) etc.
- Sub-Schemes: Modified Scheme for Setting Up Semiconductor Fabs in India; Modified Scheme for Setting Up Display Fabs in India; Modified Scheme for Setting Up Compound Semiconductors, Silicon Photonics, Sensors Fabs, and Discrete Semiconductors, along with Semiconductor Assembly, Testing, Marking, and Packaging (ATMP) / OSAT Facilities in India; Design Linked Incentive (DLI) Scheme
- National Logistics Policy: It is a complementary scheme to The PM GatiShakti National Master Plan and focuses on enhancing the soft infrastructure of India’s logistics sector.
- Objectives: A Comprehensive Logistics Action Plan (CLAP) was made with an objective of improving India’s Logistics Performance Index ranking to among the top 25 countries by 2030.
- The National Industrial Corridor Development Programme: It aims to create “Smart Cities” and advanced industrial hubs, integrated industrial corridors with robust multi-modal connectivity, and systematic urbanization.
- One-District-One-Product (ODOP): Promoting indigenous products and craftsmanship across India, the ODOP initiative has fostered local economic development, with Unity Malls being set up in 27 states to provide platforms for these unique products.
- Goods and Services Tax (GST): The new Indirect Tax regime came into effect from July 1, 2017, has unified the country’s 36 states and union territories into a single common market, simplifying the tax structure and reducing the cascading effect of multiple taxes, boosting local production competitiveness.
- Unified Payments Interface: The UPI is a real time, seamless digital payment innovation technology that has emerged as a cornerstone of India’s digital economy and a frontrunner in the global digital payments landscape.
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September 30, 2024
