Make in India is an initiative by the Government of India to encourage companies to manufacture in India and incentivize dedicated investments into manufacturing. The policy approach was to create a conducive environment for investments, develop a modern and efficient infrastructure, and open up new sectors for foreign capital. The initiative targeted 25 economic sectors for job creation and skill enhancement, and aimed “to transform India into a global design and manufacturing hub.”
“Make in India” had three stated objectives:
- to increase the manufacturing sector’s growth rate to 12-14% per annum;
- to create 100 million additional manufacturing jobs in the economy by 2022;
- to ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (later revised to 2025).
After the launch, India gave investment commitments worth ₹16.40 lakh crore (US$230 billion) and investment inquiries worth of ₹1.5 lakh crore (US$21 billion) between September 2014 to February 2016. As a result, India emerged as the top destination globally in 2015 for foreign direct investment (FDI), surpassing the United States and China, with US$60.1 billion FDI. As per the current policy, 100% Foreign Direct Investment (FDI) is permitted in all 100 sectors, except for Space industry (74%), defence industry (49%) and Media of India (26%). Japan and India had also announced a US$12 billion ‘Japan-India Make-in-India Special Finance Facility” fund to push investment.
In line with the Make in India, individual states too launched their own local initiatives, such as ‘Make in Odisha,’ ‘Tamil Nadu Global Investors Meet,’ ‘Vibrant Gujarat,’ ‘Happening Haryana’ and ‘Magnetic Maharashtra.’ India received US$60 billion FDI in FY 2016–17.
The World Bank’s 2019 Ease of Doing Business report acknowledges India’s jump of 23 positions against its rank of 100 in 2017 to be placed now at 63rd rank among 190 countries. By the end of 2017, India had risen 42 places on Ease of doing business index, 32 places World Economic Forum’s Global Competitiveness Index, and 19 notches in the Logistics Performance Index, thanks to recent governmental initiatives, which include converges, synergies and enables other important Government of India schemes, such as Bharatmala, Sagarmala, Dedicated Freight Corridors, Industrial corridors, UDAN-RCS, Bharat Broadband Network, Digital India.
Make in India has not yet achieved its goals. The growth rate of manufacturing averaged 6.9% per annum between 2014-15 and 2019-20. The share of manufacturing dropped from 16.3% of GDP in 2014-15 to 15.1% in 2019-20.
The “Make In India” initiative
Ease of Doing Business
India jumped to 63rd place out of 190 countries in the world Banks’ 2019 Ease of Doing Business Index from 130th in 2016. In February 2017, the government appointed the United Nations Development Programme (UNDP) and the National Productivity Council “to sensitise actual users and get their feedback on various reform measures.” As a result, now there is competition among the states of India to improve their current ranking on the ease of doing business index based on the completion percentage scores on 98-point action plan for business reform under Make in India initiative. Currently Andhra Pradesh, Telangana, Haryana, Odisha, Chhattisgarh and West Bengal (44.35%) are top six states (c. Feb 2018).
Ongoing global campaign
The campaign was designed by Wieden+Kennedy, with the launch of a web portal and release of brochures on the 25 sectors, after foreign equity caps, norms and procedures in various sectors were relaxed, including application of manufacturing application made available online and the validity of licenses was increased to three years.
“Zero Defect Zero Effect” slogan was coined by Prime Minister of India, Narendra Modi, as essence of the Make in India initiative that manages advanced processes, materials and technologies, to guide the production mechanism that produces products with no defects with no adverse environmental and ecological effects.
“Make in India Week” multi-sectoral industrial event at the MMRDA from 13 February 2016 was attended by 2500+ international and 8000+ domestic, foreign government delegations from 68 countries and business teams from 72 countries and 17 Indian states also held expos. Event received over ₹15.2 lakh crore (US$210 billion) worth of investment commitments and investment inquiries worth ₹1.5 lakh crore (US$21 billion), where Maharashtra led with ₹8 lakh crore (US$110 billion) of investments. Previously between September 2014 and November 2015, the government received ₹1.20 lakh crore (US$17 billion) worth of proposals from companies interested in manufacturing electronics in India.
Revision in Public Procurement Order & GFR
On June 15, 2017, Ministry of Commerce and Industry (India), the nodal ministry revised the Indian public procurement order and general financial rule to incorporate preference to Make In India. Subsequently, all the nodal agencies published their own orders to extended the scope of Make In India in procurement related to their line of products.
Make in India focuses on the following 25 sectors of the economy:
General Motors announced an investment of US$1 billion to manufacture automobiles in Maharashtra.
In April 2017, Kia announced that the company would invest over $1.1 billion to build a car manufacturing plant in Anantapur, Andhra Pradesh. The facility is the company’s first manufacturing plant in India. Kia stated that it would hire 3,000 employees for the plant, and it would produce 300,000 cars annually. Construction of the plant began in mid-2017, and is expected to be completed by March 2019. The first vehicles are scheduled to roll off production lines in mid-2019. Kia president Han-Woo Park announced that the first model produced at the plant would be an SUV(sport utility vehicle) specifically designed for the Indian market. Park also added that Kia would invest over $2 billion and create 10,000 jobs in India by 2021.
In March 2016, B.K Modi group announced that it is going to set up an electric bus manufacturing plant near Moradabad, Uttar Pradesh. The investment is through a technological tie-up with BYD.
In July 2017, SAIC Motor announced that it is going to invest ₹2,000 crore ($300 million) to build a car manufacturing plant in Halol, Gujarat.
In mid-2017, European automobile major PSA announced that in a partnership with CK Birla Group, it is going to build a car manufacturing plant in Tamil Nadu at the cost of ₹7,000 crore ($1.03 billion).
Elon Musk has recently reiterated his intent to join Make In India with all electric car manufacturer Tesla commencing partial operations by 2019 and full operations by 2020.
Hitachi announced an auto-component plant in Chennai by 2016 with an increase in their India employees count from 10,000 to 13,000.
French drone manufacturer LH Aviation announced a manufacturing plant in India to produce drones.
During Magnetic Maharashtra: Convergence 2018, Thurst Aircraft Pvt Ltd signed a MOU with Govt. of Maharashtra to build an aeroplane manufacturing plant near Palghar district (roughly 140 km north of Mumbai) with an investment of ₹35,000 crore($5.2 billion).
In January 2016, Chinese conglomerate Dalian Wanda Group announced that it would construct an industrial, residential and tourism city in Haryana at the cost of ₹68,000 crore ($10 billion). However the project was deadlocked as on 28 April 2017 because the company management was resisting a demand by the Haryana state government for a 26% equity share.
As part of Prime Minister Narendra Modi’s Narendra Modi Atma Nirbhar Bharat Abhiyan (Self Reliant India Campaign), India’s ministry of defence last month reserved 26 items that will only be procured from the local suppliers.
Modi government did it by amending clause (3)A of the Defence Procurement Order of 2017.
India and Russia have deepened their Make in India defence manufacturing cooperation by signing agreements for the construction of naval frigates, KA-226T twin-engine utility helicopters (joint venture (JV) to make 60 in Russia and 140 in India), Brahmos cruise missile (JV with 50.5% India and 49.5% Russia). A defence deal was signed during Prime Minister Narendra Modi’s visit to Russia in December 2015 which will see the Kamov Ka-226 multi-role helicopter being built in India, was widely seen as the first defence deal to be actually signed under the Make in India campaign. In August 2015, Hindustan Aeronautics Limited (HAL) began talks with Russia’s Irkut Corp to transfer technology of 332 components of the Sukhoi Su-30MKI fighter aircraft under the Make in India program. These components, also called line replacement units (LRUs) refer to both critical and non-critical components and fall into four major heads such as Radio and Radar; Electrical & Electronics System; Mechanical System and Instrument System.
Lockheed Martin announced in February 2016 its plans to manufacture F-16 in India, although it did not announce any time frame. In February 2017, Lockheed stated that it intended to manufacture the F-16 Block-70 aircraft with a local partner in India, if the Indian Air Force agreed to purchase the aircraft.
Boeing announced setting up a factory to assemble fighter planes, either the Apache or Chinook defence helicopter in India, as well as the manufacture of F/A-18 Super Hornet.
Prime minister Narendra Modi launches Make in India.
In May 2018, the Indian Army announced a ₹50,000 crore (US$7.0 billion) ammunition production project to be implemented in phases over a 10-year period. Under the project, 11 private firms will manufacture and supply ammunition for the Army’s tanks, rockets, air defence system, artillery guns, infantry combat vehicles, grenade launchers, and other field weapons. The Army noted that the objectives of the program were to cut dependence on foreign imports and to establish an inventory of ammunition that would sufficient to fight a 30-day war.
India confirmed that it will upgrade Myanmar’s T-72 tanks, supply DRDO’s radars to Armenia, Kamov 226 T multi-utility helicopters to Jordan, indigenously developed lightweight torpedoes to Myanmar (previously sold to Sri Lanka and Vietnam), Astra 70-kilometer range air- to-air missile and 40,000 pieces of a component used in Bofors artillery guns for ₹322 crore to UAE, and manufacture DRDO weapons in Saudi Arabia by 2018 (Dec 2017 update).
With the demand for electronic hardware expected to rise rapidly to US$400 billion by 2020, India has the potential to become an electronic manufacturing hub and government is targeting to achieve net zero imports of electronics by 2020. After the launch of this project, 24.8% of smartphones sold in India in the April–June quarter of 2015 were made in India, up from 19.9% the previous quarter. By 2019 that number has jumped to 95%. Mobile manufacturing made the most of Make in India.
Various companies pledged investment in India to begin manufacturing
- Foxconn: US$5 billion investment over 5 years in research and development and hi-tech semiconductor manufacturing facility in Maharashtra but it backed out from the MOU as it could not acquire the land parcel at the terms it wanted.
- Huawei: new research and development (R&D) campus in Bengaluru with an investment of US$170 million and telecom hardware manufacturing plant in Chennai.
- Lenovo: manufacturing of Motorola at Sriperumbudur near Chennai run by Flextronics.
- Micromax: 3 new manufacturing units in Rajasthan, Telangana and Andhra Pradesh with ₹3 billion (US$42 million) investment).
- Qualcomm: “Design in India” programme to mentor ten Indian hardware companies with the potential to come up with innovative solutions and help them reach global scale.
- Samsung: 10 “MSME-Samsung Technical Schools” and manufacturing of Samsung Z1 in its plant in Noida).
- Spice Group: ₹5 billion (US$70 million) mobile phone manufacturing unit in Uttar Pradesh.
- Vivo Mobile India began manufacturing smartphones at a plant in Greater Noida with 2,200 employees .
- Wistron: Taiwanese company to start manufacturing of Blackberry, HTC and Motorola devices at a new factory in Noida.
- Xiaomi: smartphones to be manufactured at a Foxconn-run facility in Sri City made operational by producing Xiaomi Redmi 2 Prime.
- HMD Global: Finnish company announced in early 2018 that it will start manufacturing all the parts of Nokia phones in Foxconn run facility in Chennai.
- VVDN Technologies: ODM based out of India expanded its manufacturing with additional 10-acre Global Innovation Park in India in line with government’s Make in India initiative.