Make in India: So far and going ahead

Abstract

In 2014, the government changed in India and Narendra Modi became the Prime Minister. Since then a number of steps have been inititated by the government over the last eight years. One of the key steps has the efforts to increase the role and scale of manufacturing in India. This lead to the Make in India initiative that was taken up towards the later part of 2014. A second round Make in India 2.0 to give a further boost came a few years later. However the pandemic hit in 2020. This impacted the manufacturing sector in a major way, primarily through the shortage of supplies of parts, components and raw materials. This led to the realization of becoming self-sufficient and the start of the Production Linked Incentive (PLI) schemes which are expected to boost manufacturing tremendously leading towards the aim of having manufacturing contributing about 25% of the GDP and the PLI schemes alone creating about 1 crore extra jobs. In this report we trace the history of various actions taken by various Indian governments starting from Independence and then study the various steps that have been taken since 2014. We start with a chapter that contains all the actions since Indian Independence (1947) till 2014 and identify the challenges faced by these interventions. We then move to a chapter on Make in India, identifying the need for the same, the steps taken and the expectations from the same. We then identify the need for the PLI schemes and the next chapter to describes the PLI schemes, some challenges expected in implementing the same and summarize by identifying that pure manufacturing supporting incentive schemes would not be sufficient. This leads to the next chapter on Linked Ecosystem Development where we identify and briefly describe various schemes that have been undertaken to support the growth of manufacturing like skill development, labor laws, ease of business measures, ease of investment, etc. In our final chapter, we end by summarizing some next steps that can be considered for undertaking towards making Make in India a success and some key metrics that may be followed to track its success. While a tremendous effort, the Make in India initiative has been a continuously learning effort where all parts seem to be in consonance right now: PLI and the manufacturing-allied ecosystem development. While GDP growth and job creation appear to be immediate aims of this initiative, along with atmanirbhartha, we believe that as manufacturing increases in India, this will open up the opportunities for more investment in Research and Development (R&D), and this will lead to the creation of more and more global products from India. As PLI stabilizes, suitable schemes to support R&D will then have to be developed. A key research initiative would be the development of indigenous raw materials to replace imports. Beyond the increase of manufacturing’s contribution to GDP, enhanced tax receipts and new job creations, we look at the creation of, in the long term, comprehensive ecosystems in each of these sectors overlaying ideation, design, development and manufacturing. This would lead to the growth in the creation of Indian-origin products that will flourish globally.