Make in India: Transforming India into a Global Manufacturing

Hub
Introduction

"Make in India" is an ambitious initiative launched by the

Government of India on September 25, 2014, with the objective
of transforming India into a global manufacturing hub. The
initiative aims to encourage both multinational and domestic
companies to manufacture their products within India. By doing
so, it seeks to create millions of jobs, enhance skill
development, boost the economy, and elevate India’s position
on the global stage. This comprehensive project explores the
key facets of the Make in India initiative, its strategic
importance, achievements, challenges, and prospects.

Historical Context:
Before delving into the specifics of the Make in India initiative,
it is essential to understand the historical context of India's
industrial sector. Post-independence, India adopted a mixed
economy model with a significant focus on self-reliance. The
industrial policy was heavily inclined towards public sector
undertakings (PSUs), with stringent regulations on private
sector participation and foreign investment. However, the
economic crisis of 1991 led to major economic reforms,
liberalizing the economy and opening it up to global markets.
Despite these reforms, India's manufacturing sector lagged its
potential due to various structural and policy challenges.

Objectives of Make in India

The primary objectives of the Make in India initiative are:

1. Increase Manufacturing Sector Growth: To increase the
manufacturing sector's growth rate to 12-14% per annum.
2. Enhance GDP Contribution: To raise the contribution of the
manufacturing sector to 25% of the GDP by 2025.
3. Create Jobs: To create 100 million additional jobs in the
manufacturing sector by 2022.
4. Attract Foreign Direct Investment (FDI): To attract more
foreign investments into the country.
5. Improve Ease of Doing Business: To improve India's ranking
on the World Bank's Ease of Doing Business Index.
6. Skill Development: To promote skill development and
enhance the skill set of the workforce.
7. Infrastructure Development: To develop state-of-the-art
infrastructure for manufacturing.

Key Sectors

The Make in India initiative identifies 25 key sectors for

investment and growth, including:

1. Automobiles
2. Automobile Components
3. Aviation
4. Biotechnology
5. Chemicals
6. Construction
7. Defense Manufacturing
8. Electrical Machinery
9. Electronic Systems
10. Food Processing
11. Information Technology and Business Process Management
12. Leather
13. Media and Entertainment
14. Mining
15. Oil and Gas
16. Pharmaceuticals
17. Ports and Shipping
18. Railways
19. Renewable Energy
20. Roads and Highways
21. Space
22. Textiles and Garments
23. Thermal Power
24. Tourism and Hospitality
25. Wellness

Strategies and Policies

To achieve its ambitious goals, the Make in India initiative has

implemented several strategies and policies, including:

1. FDI Reforms: The government has liberalized FDI norms in

several sectors, making it easier for foreign companies to
invest in India. This includes 100% FDI in sectors such as
automobiles, biotechnology, and construction development,
among others.

2. Ease of Doing Business: Significant efforts have been made

to simplify regulatory processes, reduce red tape, and improve
transparency. The introduction of the Goods and Services Tax
(GST), Insolvency and Bankruptcy Code (IBC), and single-
window clearance systems are notable steps in this direction.

3. Skill Development: The Skill India initiative complements

Make in India by focusing on skill development. It aims to train
over 400 million people in various skills by 2022.

4. Industrial Corridors: Development of industrial corridors such

as the Delhi-Mumbai Industrial Corridor (DMIC), Chennai-
Bangalore Industrial Corridor (CBIC), and Amritsar-Kolkata
Industrial Corridor (AKIC) to enhance connectivity and
infrastructure.

5. Innovation and R&D: Promoting innovation and research and

development through initiatives like the Atal Innovation Mission
(AIM) and setting up of technology hubs and incubation centers.

6. Public-Private Partnerships (PPP): Encouraging PPP models

for infrastructure development and various other sectors.

7. Incentives and Subsidies: Providing various incentives and

subsidies to promote manufacturing activities, including tax
rebates, capital subsidies, and reduced interest rates on loans.

Achievements
Since its launch, the Make in India initiative has made
significant progress:

1. FDI Inflows: India has seen a substantial increase in FDI

inflows, reaching a record high of USD 81.72 billion in 2020-21.
This demonstrates global investor confidence in the Indian
economy.

2. Ease of Doing Business: India's ranking in the World Bank's

Ease of Doing Business Index has improved significantly,
moving from 142nd position in 2014 to 63rd in 2020.

3. Manufacturing Growth: The manufacturing sector's growth

rate has seen an uptick, contributing significantly to the GDP.

4. Job Creation: The initiative has generated millions of jobs

across various sectors, though the exact number varies based
on different estimates.

5. Infrastructure Development: Significant infrastructure

projects, such as the development of industrial corridors and
smart cities, have been initiated.

6. Sectoral Growth: Several sectors have seen notable growth.

For instance, the automobile sector has attracted significant
investments, and India has become one of the largest
automobile manufacturers in the world.

Challenges
Despite its achievements, the Make in India initiative faces
several challenges:

1. Infrastructure Bottlenecks: While progress has been made,

India still faces infrastructure bottlenecks, including inadequate
power supply, poor transportation networks, and limited access
to industrial land.

2. Complex Regulatory Environment: Despite reforms, India’s

regulatory environment remains complex and can be a
deterrent for investors.

3. Skilled Labor Shortage: There is a shortage of adequately

skilled labor to meet the demands of the manufacturing sector.
The education and vocational training systems need significant
upgrades.

4. Global Competition: India faces stiff competition from

established manufacturing hubs like China, Vietnam, and other
Southeast Asian countries.

5. Policy Implementation: Effective implementation of policies

at the grassroots level remains a challenge due to bureaucratic
inefficiencies and corruption.

6. Economic Slowdown: Periodic economic slowdowns, like the

one triggered by the COVID-19 pandemic, have impacted the
growth trajectory of the manufacturing sector.
Prospects

The Make in India initiative, despite its challenges, holds

significant potential for the future. Several factors contribute to
this optimistic outlook:

1. Young Workforce: India has a demographic advantage with a

young and dynamic workforce that can drive manufacturing
growth.

2. Digital Transformation: The push towards digitalization,

through initiatives like Digital India, is creating a conducive
environment for modern manufacturing practices.

3. Renewable Energy: India’s focus on renewable energy

sources, such as solar and wind power, is set to reduce
dependency on fossil fuels and provide a sustainable energy
supply for industries.

4. Global Supply Chain Realignment: The global supply chain

realignment, accelerated by the US-China trade tensions and
the COVID-19 pandemic, presents an opportunity for India to
position itself as a preferred manufacturing destination.

5. Government Support: Continued government support in the

form of policy reforms, incentives, and infrastructure
development is likely to sustain the momentum of the Make in
India initiative.

6. Innovation and Startups: The rise of innovation and the

startup ecosystem in India is fostering a culture of
entrepreneurship, which can lead to new manufacturing
enterprises and innovative solutions.

Case Studies

1. Automobile Sector: The automobile sector has been one of

the biggest success stories of the Make in India initiative.
Companies like Maruti Suzuki, Hyundai, and Tata Motors have
not only expanded their manufacturing capacities but have also
turned India into an export hub. The advent of electric vehicles
(EVs) and the government's push for sustainable mobility are
set to further bolster this sector.

2. Pharmaceuticals: India’s pharmaceutical industry, known as

the "Pharmacy of the World," has benefited significantly from
the Make in India initiative. The country is a leading producer of
generic drugs, and the pandemic highlighted India's capability
in producing vaccines and medical supplies at scale.

3. Electronics and IT: The electronics manufacturing sector has

seen a surge in investments, with global giants like Apple and
Samsung setting up manufacturing units in India. The
Production Linked Incentive (PLI) scheme has been
instrumental in attracting investments in this sector.

Detailed Analysis of Key Sectors

1. Automobiles and Auto Components

The automobile industry in India is one of the largest in the

world, and the Make in India initiative has provided a significant
boost to this sector. The sector comprises passenger vehicles,
commercial vehicles, three-wheelers, and two-wheelers, with
two-wheelers occupying the dominant position in terms of
production and sales.

Key Achievements:
- India is the largest manufacturer of two-wheelers globally.
- The country has attracted significant investments from global
automobile giants like Suzuki, Hyundai, Ford, and General
Motors.
- India has also emerged as a major exporter of automobiles,
with countries in Africa, the Middle East, and South America
being major markets.

Challenges:
- Competition from established automobile manufacturing
countries.
- Need for continuous innovation and adaptation to new
technologies, including electric and autonomous vehicles.
- Infrastructure development, particularly in logistics and
transportation, to support large-scale manufacturing and
exports.

2. Pharmaceuticals

India's pharmaceutical sector is renowned for its capacity to

produce cost-effective generic medicines and vaccines, earning
the moniker "Pharmacy of the World." The sector is heavily
supported by a robust domestic market and a significant export
presence.
Key

Achievements:
- India is the largest provider of generic drugs globally,
accounting for 20% of global exports in terms of volume.
- The country played a crucial role during the COVID-19
pandemic by producing and supplying vaccines and medicines
worldwide.
- Significant investments in research and development (R&D)
have led to innovations in drug formulations and biotechnology.

Challenges:
- Regulatory challenges and quality control issues in some
segments.
- Competition from countries with lower production costs.
- Need for greater investment in R&D to move up the value
chain from generics to new drug development.

3. Information Technology and Business Process Management

(IT-BPM)

The IT-BPM sector has been one of the pillars of India's

economic growth, with the country being a preferred
destination for IT services and outsourcing.

Key Achievements:
- The sector contributes significantly to India's GDP and
employment, with millions of jobs created.
- Indian IT companies like TCS, Infosys, and Wipro have a
significant global presence.
- The sector has seen robust growth in exports, contributing
significantly to foreign exchange earnings.

Challenges:
- Rapid technological changes requiring continuous skill
upgradation.
- Increasing competition from other countries offering IT
services.
- Ensuring data security and addressing regulatory challenges
in global markets.

4. Renewable Energy

India's commitment to renewable energy is a critical

component of the Make in India initiative, focusing on
sustainability and reducing carbon footprints.

Key Achievements:
- India has become one of the largest producers of solar
energy, with significant investments in solar parks and rooftop
solar projects.
- The country has also made strides in wind energy, with
several wind farms set up across the nation.
- Policies promoting renewable energy, such as subsidies and
tax incentives, have attracted both domestic and foreign
investments.
Challenges:
- High initial capital costs and need for technological
advancements.
- Integration of renewable energy into the national grid.
- Addressing land acquisition issues for large-scale renewable
projects.

5. Defense Manufacturing

With the aim of achieving self-reliance in defense production,

the Make in India initiative has emphasized the need to boost
domestic manufacturing in this strategic sector.

Key Achievements:
- Policies have been implemented to promote defense
manufacturing, including liberalized FDI norms and the
introduction of the Defense Procurement Procedure (DPP).
- Several global defense companies have set up manufacturing
units in India in collaboration with Indian firms.
- India's defense exports have seen a significant increase, with
the country exporting defense equipment to various nations.

Challenges:
- High dependence on imports for advanced technology and
components.
- Need for more significant investments in R&D and innovation.
- Ensuring the timely execution of defense projects and
maintaining quality standards.
Technological Integration and Innovation

Innovation and technological advancement are crucial for the

success of the Make in India initiative. The government has
launched several programs and schemes to foster innovation
and support technological integration across sectors.

Atal Innovation Mission (AIM):

- AIM aims to promote a culture of innovation and
entrepreneurship across India.
- It has established Atal Tinkering Labs in schools and Atal
Incubation Centres to support startups and innovators.

Digital India:
- Digital India complements Make in India by promoting digital
infrastructure, digital literacy, and e-governance.
- The initiative has led to the development of smart cities,
digital payments, and a robust IT infrastructure, supporting
manufacturing and other sectors.

National Manufacturing Policy (NMP):

- The NMP aims to enhance the global competitiveness of the
Indian manufacturing sector.
- It focuses on the development of National Investment and
Manufacturing Zones (NIMZs), promoting innovation, and
improving supply chain logistics.

Public-Private Partnerships (PPP)

Public-Private Partnerships play a crucial role in the Make in
India initiative by leveraging private sector expertise and
investment for public infrastructure and services.

Key Examples:
- Development of industrial corridors, such as the Delhi-Mumbai
Industrial Corridor, through PPP models.
- Collaboration with private players in sectors like renewable
energy, defence manufacturing, and infrastructure
development.

Benefits:
- Accelerated infrastructure development and improved service
delivery.
- Sharing of risks and resources between the public and private
sectors.
- Enhanced efficiency and innovation through private sector
participation.

Global Supply Chain Realignment

The COVID-19 pandemic and geopolitical tensions have led to a

rethinking of global supply chains, presenting an opportunity
for India to position itself as a key player.

Strategies:
- Developing resilient supply chains by promoting domestic
manufacturing and reducing dependency on imports.
- Attracting global companies to set up manufacturing units in
India through incentives and ease of doing business reforms.
- Strengthening trade relations with countries and regions
looking to diversify their supply chains away from China.

Opportunities:
- Increased demand for alternative manufacturing hubs in Asia.
- Potential for India to become a significant player in global
supply chains for sectors like electronics, pharmaceuticals, and
automotive components.

Skill Development and Employment

The success of the Make in India initiative is heavily dependent

on the availability of a skilled workforce. The Skill India
initiative complements this by focusing on skill development
and vocational training.

Key Programs:
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides skill
training to millions of youths across the country.
- National Skill Development Corporation (NSDC): Facilitates
skill development through partnerships with industry, training
providers, and government agencies.

Achievements:
- Millions of individuals have received skill training, enhancing
their employability.
- Collaboration with industry to align training programs with
market demands.
- Establishment of skill development centers and vocational
training institutes across the country.

Challenges:
- Ensuring the quality of training programs and their alignment
with industry needs.
- Expanding the reach of skill development initiatives to rural
and remote areas.
- Continuous upgradation of skills to keep pace with
technological advancements.

Infrastructure Development

Robust infrastructure is critical for the success of the Make in

India initiative. The government has undertaken several
measures to develop state-of-the-art infrastructure to support
manufacturing and other sectors.

Key Projects:
- Development of industrial corridors, such as the Delhi-Mumbai
Industrial Corridor (DMIC), which aims to create world-class
infrastructure and industrial clusters.
- Smart Cities Mission: Aims to develop 100 smart cities with
modern infrastructure, digital connectivity, and sustainable
urban planning.
- Bharat Mala and Sagar Mala projects: Focus on enhancing
road and port infrastructure to improve logistics and
connectivity.
Achievements:
- Significant progress in the development of industrial corridors
and smart cities.
- Improved connectivity and logistics through the expansion of
road and port infrastructure.
- Increased private sector participation in infrastructure
development through PPP models.

Challenges:
- Addressing land acquisition and environmental clearance
issues for large-scale infrastructure projects.
- Ensuring timely execution and maintenance of infrastructure
projects.
- Attracting sufficient private sector investment in infrastructure
development.

Conclusion

The Make in India initiative is a transformative policy that aims

to catapult India into the league of global manufacturing
leaders. While it has achieved notable success in attracting
investments, improving the ease of doing business, and
boosting various sectors, several challenges need to be
addressed. Infrastructure development, regulatory
simplification, skill enhancement, and effective policy
implementation are crucial for sustaining the momentum of this
initiative.
With a young workforce, a burgeoning startup ecosystem, and
a favorable global economic environment, India has the
potential to realize the vision of Make in India. The continued
commitment of the government, combined with proactive
participation from the private sector and global investors, will
be key to transforming India into a global manufacturing
powerhouse. The journey ahead requires coordinated efforts,
innovation, and resilience, but the foundation laid by the Make
in India initiative provides a robust platform for achieving these
ambitious goals.