Answer:

Introduction:

India’s economic evolution has witnessed significant shifts from import substitution and self-sufficiency policies post-independence to the contemporary Make in India initiative. These policy transitions signify India’s adaptive approach in response to changing global and domestic economic dynamics. Exploring the differences between these policies and suggesting focus areas for the upcoming New Industrial Policy are critical for charting India’s path towards becoming a global manufacturing hub.

Body:

Import Substitution and Self-Sufficiency:

• Economic and Trade Policy: Import substitution is an economic and trade policy focusing on replacing foreign goods with domestic products. This strategy was commonly adopted by countries in the early stages of industrialization to protect their nascent industries from foreign competition.
• Objective and Approach: The primary goal was to generate income, create employment, and achieve self-sufficiency. India, post-independence until the economic reforms of 1991, pursued this policy by imposing heavy tariffs on imports to protect its industries.

Make in India Initiative:

• Global Competitiveness: Unlike import substitution, Make in India aims to make Indian manufactured goods globally competitive by harnessing the country’s demographic dividend.
• Open Trade Policy: Make in India does not advocate a protectionist policy in trade. Instead, it promotes the open flow of goods, services, and professionals.
• Foreign Investment and Manufacturing Expansion: The initiative involves opening various sectors to foreign investment, raising FDI limits, and abolishing certain barriers like the FIPB. The goal is to boost manufacturing, increase output from the current level of about 16% of GDP to 25% by 2022, create employment opportunities, and drive economic growth.

Common Objectives but Different Means: 

Both Import Substitution and Make in India share common objectives like generating employment and driving economic growth, but they adopt different means to achieve these goals​​.

Suggestions for the Upcoming New Industrial Policy:

• Incorporation of Modern Technologies: The new policy aims to make India a manufacturing hub under the Make in India initiative. It will incorporate modern smart technologies such as IoT, artificial intelligence, and robotics for advanced manufacturing.
• Thematic Focus Areas: The formulation of the new policy has involved consultative approaches with focus groups covering Manufacturing and MSME; Technology and Innovation; Ease of Doing Business; Infrastructure, Investment, Trade, and Fiscal policy; and Skills and employability for the future.
• Subsuming National Manufacturing Policy: The new Industrial Policy is expected to subsume the National Manufacturing Policy, reflecting the transformation of India into one of the fastest-growing economies with strong macroeconomic fundamentals and path-breaking reforms​​.

Conclusion:

The transition from import substitution to the Make in India initiative marks a significant shift in India’s economic strategy, moving from a protectionist approach to embracing global competitiveness and open trade policies. The upcoming New Industrial Policy, building on the Make in India initiative, should focus on integrating advanced technologies, fostering innovation, and enhancing skills to establish India as a global manufacturing hub. This approach aligns with the evolving dynamics of the global economy and India’s growth trajectory.