Make in India : An Overview

Introduction

“Come make in India. Sell anywhere, [but] make in India,” said Prime Minister Narendra Modi, defining his vision for his Make in India campaign in 2017.

Launched as a flagship programme in 2014 after the Modi government witnessed a sweeping electoral victory, Make in India is an ambitious project with an aim to increase the GDP contribution of India’s manufacturing sector from 16% (as of FY2014) to 25% (by FY2025). The project also aims to localise and indigenise manufacturing for all companies, Indian or foreign. Make in India was also to become a name that resounded with the creation of a 100 million jobs by 2022, more infrastructural development in the form of roads, hospitals and industries, and other novel achievements in the fields of science and technology. The project was so aggressive that under Make in India, tenders worth ₹25,000 crores were revisited and recalled by the government to keep manufacturing strictly in boundaries.

This initiative helped India achieve the peak of its Foreign Direct Investment (FDI) in FY 2017-28, which was an all-time high of $61.9 billion. It also sparked state-wise movements, such as ‘Make in Odisha’, ‘Happening Haryana’ and ‘Magnetic Maharashtra’. India also jumped 23 places from rank 100 to rank 77 on the World Bank’s ‘Ease of Doing Business’ index that year, and has only been climbing the ranks ever since.

In an ambitious bid to fulfil previously defined goals for the initiative, projects under the Make in India umbrella do not seem to stop - on September 4, 2019, Modi laid down the foundation for a ₹2,000 crore project in Mumbai, with the backing of Shiv Sena President Uddhav Thackeray. Titled the ‘Mumbai Metro Coach’ project under Make in India, the project aimed to not only ease the process of commuting in the heavily populated city, but also to create jobs from the indigenous manufacturing of the coach that was inaugurated by PM Modi last year. The government also inaugurated the greenfield industrial smart city as part of the Make in India endeavour in Aurangabad, calling it the Aurangabad Industrial City (AURIC).

Obstacles in the Project

In a world of sustainability and climate cooperation, the new metro project is a clear statement by the incumbent government that infrastructural development and environmental protection cannot go hand-in-hand. Under Modi’s Mumbai Metro Coach Project, the city’s green cover will be lost significantly. The authorities have duly accepted that the environment will be disturbed due to the development of infrastructure, and this has met widespread protests by environmental and citizen groups in the city. But, the Mumbai Metropolitan Region Development Authority (MMRDA) has sidelined this dissent, reassuring the public that this disturbance is ‘temporary’. Not only Mumbai, even Bangalore is facing deforestation amidst the metro project conundrum. Environmental concerns have been a major drawback under the Make in India umbrella, which carries not only metro projects, but also projects in coal, mining and transportation.

Adding to this are the latest allocations in the Union Budget (FY 2019), ones emphasising new-age skills such as 3D printing and robotics, which can be used to transform factory floors and industrial setups. While the development of information technology is a trending theme globally, it undermines India’s labour-intensive capacities, in the light of the fact that the 45-year high rate of unemployment in the country has already created an army of unemployed citizens. This is, in-turn, helping wage levels remain at a minimal. Moreover, policies to invite FDI have undermined interests of local and national Indian companies. This is because excessive liberalisation and ease of investment has enabled foreign companies to now hold the majority share in Indian companies instead of going into a joint venture with them, which is indirectly allowing foreign companies to dominate the Indian market.

A lot of the promises made by Make in India, have been left unrealised. According to the recent Annual Survey of Industries (ASI), India has faced a deceleration in industrial growth from 2015 to 2017. While the inflow of FDI flourished, only 28% of the total amount was dedicated to India’s manufacturing sector, a number significantly below 44%, which was the amount of FDI targeted towards manufacturing during UPA’s second term. There have also been no significant successes in India’s contribution to global exports and trade. India’s total contribution to global trade has been 1.7% in 2017, ever-so-slightly north of 1.6% in 2014. In this background, what has also been ignored is the preference of companies across sectors to import goods rather than manufacturing them locally. Four important manufacturing industries of the country - Iron and Steel, Organic Chemicals, Plastics, and Electronics - are still major importers.

Way Forward

The Make in India scheme can been strongly linked with a need for digitisation. Companies must be urged to digitise their supply chain. For Medium and Small Enterprises (MSMEs) to be able to beat global competition while manufacturing locally and not having to create their own supply chain, they must be ‘online’. A revivalist approach to Make in India, as being witnessed around the country recently, is a necessary driver to facilitate the project.

With the disruptions in global value (demand and supply) chains amidst COVID-19, Make in India serves as a reminder that despite colossal levels of globalisation, things could go wrong, borders could shut down, and self-reliance could be an escape. In this light, the call for an ‘Atmanirbharta’ will serve the nation right. The Atmanirbhar Bharat Abhiyan (ANBA), as announced by PM Modi and Finance Minister Nirmala Sitharaman in May 2020, aims to enhance India’s manufacturing capabilities in order to remain self-reliant. A combined policy approach to Make in India and Atmanirbharta, especially in the fields of healthcare, education, technology and manufacturing is needed in order to bring a flailing economy back on track. At the same time, attacking the problem on the demand side (i.e, by providing fiscal relief to those in need) can jumpstart consumption, and therefore, invite private investments by Indians, for Indians.

Unprecedented times call for unprecedented measures. Hence, going “vocal for local”, especially through a reaffirmed Make in India campaign, can go a long way in decreasing India’s global dependency, while upscaling its inherent productive capacities. At the same time, addressing challenges to the campaign, by adopting sustainable alternatives to energy for infrastructure development, using EdTech and Digital Media for marketing, and empowering MSMEs (which is the primary job-generator for a country like India), self-reliance will be possible.

By-

Anushka Saxena

(anushkasaxenalsr@gmail.com)