The Future of ‘Make in India’

June 30, 2016 3:00 pm

How far India needs to go to achieve the tag ‘Manufacturing Hub’ 
 The ‘Make in India’ campaign was initiated by Prime Minister Narendra Modi with a sole intention of making India a manufacturing hub. The campaign is to encourage foreign companies to make in India and to boost the employment rate in India. It’s been two years since the initiative was announced in 2014 and things are changing and it is quite visible. It is now time to see what has changed and how much has changed and what more needs to be changed for India to achieve the tag ‘Manufacturing Hub’.
Global investmentsPrime Minister has been visiting countries all over the world and urging them to invest and make in India since the announcement of ‘Make in India’ as huge opportunities lie in India for foreign investors. His visit to Japan in 2014 brought in investment promise of $ 35 billion in India over a period of five years. Also, Japan promised to contribute towards bullet trains in India. The ‘Make in India’ campaign gained momentum in Japan with Japanese manufacturers interested in investing in India.
Germany is considered as one of the industrial hubs of the world. Prime Minister’s visit to Germany last year for the Hannover Messe event, world’s largest industrial trade fair where India was a partner country for the event only strengthened India’s path in moving a step ahead to achieve the goal of making India a manufacturing hub.
‘Make in India’ fair earlier this year in BKC, Mumbai closed with Rs 15.2 lakh crore ($222 Billion). “We have already opened the economy across sectors to the world. We’re now showcasing, connecting and collaborating for manufacturing in the country,” said Amitabh Kant, Secretary of India’s Department of Industrial Policy and Promotion (DIPP), adding that the summit is not about manufacturing alone, but innovation and nurturing inventors.
Over 2,500 international and 8,000 domestic companies claimed to have participated in the week-long multi-sectoral industrial event ‘Make in India’, apart from foreign government delegations from 68 countries and business teams from 72 nations.
Boost for FDIRecent policy changes have made it easier to invest directly in Indian companies. Foreign Direct Investment (FDI) is perhaps the easiest way to take advantage of the ‘Make in India’ campaign. It is a main source of non-debt financial resource for the economic development of India. Foreign companies invest in India to take advantage of relatively lower wages, special investment privileges such as tax exemptions, etc.
The government has allowed 100 per cent FDI in all the sectors except space (74 per cent), defence (49 per cent) and news media (26 per cent). FDI limit in defence sector has been raised from the earlier 26 per cent to 49 per cent currently.
FDI also means achieving technical know-how and generating employment. To make India a sought after foreign investment destination, the Ministry of Finance is planning to introduce the residency permit policy, which will allow key executives of foreign companies making investments worth $ 2 billion or more in India, to avail various facilities such as special package on upscale housing, residency permits allowing long stay in the country, and cheap rates for utilities. India has emerged as the number one FDI destination in the world during the first half of 2015.
Defence manufacturing got momentumIn defence, the objectives of ‘Make in India’ programme are pursued by according preference to ‘Buy (Indian)’, ‘Buy and Make (Indian)’ and ‘Make’ categories of capital acquisition over ‘Buy & Make (Global)’ or ‘Buy (Global)’ categories and other policy initiatives such as liberalisation of FDI policy and Industrial Licensing policy, simplification of export procedures, creating level playing field for Indian private and public sector companies. In the Financial Year 2015-16, 33 capital acquisition proposals amounting to around Rs 55,800 crore have been accorded ‘Acceptance of Necessity (AoN)’under ‘Buy (Indian)’ and ‘Buy & Make (Indian)’ categories of capital acquisition till Jan 16.

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