India at present is considered to be a hotspot for financial investments globally. The prime reason is the well-functioning Indian economy despite slowdown in other BRICS countries and Europe. Rightly said by PM Narendra Modi at the Madison Square speech that India will boom owing to three D’s- ‘Democracy’, ‘Demand’ and ‘Demographic Dividend’. With our domestic manufacturing, pharmaceuticals, Information Technology and textiles industry growing at a tremendous pace, the potential is still unearthed and unfathomable. The new government might be shrouded in conspiracies and internal vendettas, but the idea of Make in India has created waves of hope and energy among investors abroad. This benefit if rightly leveraged can solve many major chronic problems worrying the Indian subcontinent. Here are few facts simply explained about Make In India.
1. Sectors: The sectors which are under the scanner of this massive enterprise are Automobiles, Automobile components, Aviation, Biotechnology, Chemicals, Construction, Defence Manufacturing, Electrical Machinery, Electronic Systems, Food Processing, IT and BPM, Leather, Media and Entertainment, Mining, Oil and Gas, Pharmaceuticals, Port and Shipping, Railways, Renewable energy, Roads and Highways, Space, Textiles and Garments, Thermal Power, Tourism and Hospitality, and Wellness.
2. Ease of doing business: Indian authorities are keen on cutting excessive ‘red tape’ and working on the licenses and regulations to attract significant FDI from prospective investors and institutions. The Industrial License has been made online on a e-Biz portal with validity extended to three years. The single window platform is facilitated by integration of Central Government Departments and Ministries.
3. Infrastructure: Infrastructure management is in juxtaposition with smart cities, specifically the Delhi Mumbai Industrial Corridor, Chennai Bangalore Industrial Corridor, East Coast Economic Corridor, and Amritsar-Kolkata Industrial Corridor. The industrial projects are under the approval of Modified Industrial Infrastructure Upgradation Scheme.
4. Reforms in FDI: FDI cap in defence raised to 49%. Besides, for modern and state-of-art technology, the defence sector FDI is 100%. For construction, operation and maintenance in rail infrastructure , FDI through automatic route can be 100%. Some high-end projects such as railway electrification, high speed trains, dedicated freight corridors, signalling systems, passenger terminals and Mass Rapid Transport Systems are under operation.
5. Ongoing Projects: DMIC is currently the biggest ongoing project of the Make in India program. Among the 24 cities to be developed the first 7 are Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh and Gujarat and two in Maharashtra, to be completed by 2019. Residential townships, new cities, logistics hub, sustainable development, world class infrastructure and power as well as waste management are the basic priorities. The prime rganisations involved are Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC), Japan Bank for International Cooperation (JBIC), HUDCO, IIFCL, LIC, through Department of Public Policy (DIPP).
6. Amazing facts about India: India has vast amount of natural and shale gas reserves.
It is also world’s 4th largest consumer of crude oil and petroleum products. Expected investments in oil and gas value chain is $70 billion. This sector also contributes to 39.2% of primary energy consumption. 100% FDI is allowed in the exploration, infrastructure, re-gasification, marketing, and refining.
On the other hand, India will be world’s 3rd largest pharmaceutical market by 2020. Also, it holds 20% of global generic medicine industry.
The IT & BPM industry will be worth $225 billion by 2020. It also contributes 8.1% of the country’s GDP.
India is the 9th largest civil aviation market. and has potential to become 3rd largest by 2020.
India is the 3rd largest market in the Asia=Pacific region of biotechnology, which can turn into a $100 billion industry by 2025.
The construction activity in India accounts for 10% of its GDP.
With a pool of brilliant scientists, India stands 3rd in terms of electronic systems and the consumer electronics market can be worth $29 billion by 2020.
India is the 4th largest market for automobiles by volume having a CAGR of 8-9%.
India is the fourth largest producer of steel in the world.
Accounting to 2.11% of the GDP, chemicals production by India ranks 6th in the world by output.
India is home to 127 agro-climatic zones, with top rankings in production of important cereals and horticulture.
7. Investments: World’s largest contract electronic maker, Foxconn Technology Co. Ltd is planning on making several manufacturing units in India. Computer giants Sony and Lenovo are analyzing setting up of manufacturing units in India. Karbonn mobiles wants to start assembly lines and Micromax, phone making units. Volvo will export made in India buses to Europe, Mahindra is working on underwater warfare equipment, Phone maker Celkon will establish manufacturing unit in Hyderabad. World’s biggest firms are pitching to get into India’s defence business industry. Aircraft manufacturer Airbus SAS will establish supply chain infrastructure for manufacturing military equipments and helicopters.
8. Government Initiatives: A $10 billion investment is set for developing semi-conductor and computer chip manufacturing unit. Another 10,000 crore is announced for shipbuilding development in the Union Budget with expected funds from Exim Bank, IDBI and IFCI Ltd.
9. Challenges ahead: Difficult business environment, archaic laws and political or bureaucratic obstructions are a major downturn which has to be checked seriously. The legislative framework and legal obligations need to be closely monitored. Furthermore, the Intellectual Property Laws must be revamped according to the trend in business and innovation making it globally compliant. The challenge to create jobs must look into the MSME sector, keeping in mind the land acquisition and labour laws. The Confederation of India Industry is trying to simplify the environment, forest and wildlife clearances. GAAR and GST needs to be amended accordingly. Taxation needs to be clarified to retain the investor and attract bigger investments. World Bank has rightly quoted that education will be the key to success of Make in India campaign to make it a global manufacturing hub.
10. Supporters: German Defence Minister Ursula von der Leyen[/caption] has lauded Make in India calling for increased cooperation in cybercrime and free sea navigation. PepsiCo. chairman and chief executive officer (CEO) Indra Nooyi believes in the potential of this campaign in boosting productivity and employment. Chinese envoy has expressed interest in manufacturing units in India.