For many years, while India’s services sector grew rapidly, its manufacturing sector remained largely stagnant, contributing a relatively low share to the nation’s GDP. This led to a situation often described as “jobless growth,” where the economy expanded without creating enough employment opportunities for its large and youthful population.
To change this narrative and unleash the country’s industrial potential, the Government of India launched the Make in India initiative on September 25, 2014. This was not just a slogan, but a powerful call to action and a comprehensive national program designed to transform India into a global design and manufacturing hub. It was an open invitation to both domestic and international companies to invest, innovate, and manufacture their products in India.
What is Make in India? The Vision
- Full Name: Make in India
- Launched: September 25, 2014
- The Vision: To make India a globally competitive and favored destination for manufacturing, design, and innovation.
The initiative was built upon four key pillars, signaling a major shift in the government’s approach to business.
The Four Pillars of Make in India
- New Processes: The top priority was to improve the “Ease of Doing Business.” This involved simplifying regulations, de-licensing, and making the government’s processes more transparent and efficient for businesses.
- New Infrastructure: To support a world-class manufacturing sector, the initiative focused on the development of modern and efficient infrastructure, including industrial corridors, smart cities, and upgraded ports and railways.
- New Sectors: The government opened up several key sectors, such as defense, railways, construction, and insurance, to higher levels of Foreign Direct Investment (FDI), inviting global expertise and capital.
- New Mindset: A fundamental shift was sought in the role of government, from being a restrictive regulator to a supportive facilitator for businesses.
Key Objectives of the Initiative
The overarching goal of Make in India is to fuel economic growth and job creation through a focus on manufacturing. Its specific objectives include:
- To significantly increase the growth rate of the manufacturing sector.
- To raise the contribution of the manufacturing sector to the country’s Gross Domestic Product (GDP).
- To create millions of new and sustainable jobs for the youth.
- To attract a higher inflow of Foreign Direct Investment (FDI) and technology.
- To foster a culture of innovation and enhance the global competitiveness of the Indian industry.
How Does it Work? Policy Reforms and Actions
The Make in India initiative has been driven by a series of major policy reforms.
Ease of Doing Business Reforms
This has been the cornerstone of the initiative. The government has undertaken numerous reforms, such as introducing a single-window clearance system, simplifying tax regimes (like the introduction of GST), and reducing the number of permits required to start a business. These efforts led to a dramatic improvement in India’s ranking in the World Bank’s annual Ease of Doing Business report.
Liberalized FDI Policy
The government has systematically liberalized its FDI policy across a multitude of sectors, allowing up to 100% foreign investment under the automatic route in many areas. This has made it significantly easier for global companies to invest and set up operations in India.
Production Linked Incentive (PLI) Scheme
Perhaps the most powerful offshoot of the Make in India vision is the Production Linked Incentive (PLI) scheme. Launched to give a targeted push to domestic manufacturing, the PLI scheme provides a direct financial incentive to companies on the incremental sales of products manufactured in India. It focuses on strategic sectors like electronics (especially mobile phones), pharmaceuticals, automotive components, and solar cells. This scheme has been a game-changer in attracting large-scale manufacturing investments.
The Human Touch: The Mobile Manufacturing Revolution
Just a decade ago, India was one of the world’s largest markets for mobile phones, but almost every phone sold was imported. The “Made in India” tag on a smartphone was a rarity.
The Make in India initiative, followed by the targeted push of the PLI scheme, completely transformed this landscape. Attracted by the improved business environment and the financial incentives, global giants like Apple, Samsung, and their contract manufacturers set up massive assembly plants across the country. This, in turn, spurred the growth of an entire ecosystem of companies that manufacture components like chargers, batteries, and casings.
The result? Today, India is the second-largest mobile phone manufacturer in the world. This revolution has not only reduced the country’s dependence on imports but has also created hundreds of thousands of jobs, particularly for young men and women who have been trained for roles on the assembly line. The smartphone in your hand is now a powerful symbol of the success of this national mission.
Impact and Challenges
Impact
- Surge in FDI: The years following the launch of Make in India have seen a record inflow of Foreign Direct Investment into the country.
- Sectoral Success: The initiative has yielded spectacular results in specific sectors like mobile manufacturing, defense production, and toy manufacturing, where domestic production has soared.
- Improved Business Climate: The sustained focus on reforms has significantly improved the overall business environment and investor confidence.
Challenges
- Structural Hurdles: Deep-rooted challenges such as complex land acquisition processes and the need for further labor law reforms still persist.
- Global Competition: India faces intense competition from other established manufacturing economies in Southeast Asia.
- The Skill Gap: To support advanced and high-tech manufacturing, there is a continuous need to upgrade the skills of the workforce, which requires a strong interface between industry and the education system.
Conclusion
Make in India is a dynamic and ongoing national program that has successfully reoriented India’s economic focus towards building a strong and competitive manufacturing sector. It is far more than just a catchy slogan; it represents a comprehensive overhaul of policies and processes to make India a better place to do business. While the journey to becoming a global manufacturing powerhouse is a long one, the Make in India initiative has instilled a new sense of confidence and has laid a robust foundation for industrial growth, job creation, and economic self-reliance.