Make in India is a crucial government-led initiative to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and construct world-class manufacturing infrastructure within the subcontinent.
The initiative is a stirring call to action for citizens and business leaders in India and an appeal to investors and partners worldwide. Make in India is much more than a motivational phrase. It is an unparalleled revamp of obsolete procedures and rules.
Make in India and Manufacturing Industry
As the name implies, this initiative aims to foster the development of manufacturing in India, thereby making the country part of several critical industrial supply chains.This in turn, will lead to the development of new jobs, allowing the encashment of the demographic dividend. Prime Minister Narendra Modi has time and again reiterated that this initiative would enable the country to reduce import dependencies and become AtmaNirbhar. Broadly, It encourages corporations to come to India to make things rather than only advertise them.
AtmaNirbhar Bharat is rooted in five pillars: economy, infrastructure, system, vibrant demography, and demand. The economy is one of the five pillars which is directly connected with the Manufacturing Industry as today, this sector accounts for about 17% of the country's GDP.
Why is the manufacturing industry the focus?
Manufacturing accounts for 17% of India's GDP. It has emerged as India's most rapidly expanding sector. India's Prime Minister, Narendra Modi, launched the 'Make in India' campaign to position India as a manufacturing powerhouse and elevate the Indian economy internationally. By 2022, the government hopes to have created 100 million new jobs through this initiative.
In an attempt to reengineer supply chains, especially in the case of key industries, the Indian government has altered regulation to attract greater investment. In defence manufacturing for instance, Foreign Direct Investment(FDI) under the automatic route was raised from 49% to 74% in May 2020.
How does the manufacturing push benefit the economy?
For a net importer like India, developing domestic supply chains for essential and non-essential products is vital. Economists believe that increasing labour productivity is critical for increasing economic growth potential. Other than favouring economic development, it would also reduce the reliance on non-essential imports improving the overall balance of payments. In the current scenario, India imports a wide range of goods, including heavy machinery, toys, and other goods that otherwise would be produced domestically.
Jobs too are a critical reason for the extreme focus being given to boost the manufacturing sector in India. This need has been exaggerated further as a result of COVID-19. Months of strict lockdown resulted in the loss of millions of jobs and the closure of several enterprises. A rapid collapse of the informal sector too has led to the loss of millions of jobs. A robust manufacturing industry has the potential to absorb a large part of the available workforce.
Reengineering Supply Chains
The Coronavirus pandemic (COVID-19) has caused havoc to global industry. It has pushed businesses to rethink risk mitigation measures and change several long-held supply chain management assumptions. There is broad agreement that supply chains need to be reengineered to reduce the possibility of such disruptions being caused in the future.
As a result, India has been presented with a unique opportunity to develop many sectors that till now lacked the installed manufacturing capacity. Additional capacity would not only be integrated into global supply chains, but would also be beneficial in serving the 1.3 billion people that live in the subcontinent more efficiently.
The scale of manufacturing in India
India has a GDP of $2.3 trillion and is the world's ninth-largest economy by purchasing power parity. Compared against the 52% service sector, manufacturing accounts for just 17% of the country's GDP. Historically, in India, very few manufacturing companies focused on the concept of actually making in India, and instead, localised only certain parts of the supply chain. Make in India, changes this. It encourages entrepreneurs to foster innovation, protects intellectual property, and pushes large scale investments into the construction of world-class manufacturing infrastructure within the subcontinent.
How are we helping the mission Make in India?
Lipi strongly believes in the India story. We are amongst the few Indian firms capable of designing, manufacturing, and servicing our entire product line. Our cutting-edge production facilities, along with our in-depth knowledge of new technologies, enable us to meet the growing demands of worldwide markets.
The Make in India initiative is critical for India's economic growth since it intends to capitalize on the country's current talent pool by expanding job possibilities and empowering more prominent industries.
How is India participating in global supply chains?
The recent Quad declaration on collaboration for robust global supply chains is notable. These advancements have opened a once-in-a-lifetime opportunity for India. Large corporations have a chance to explore particular investment destinations by the strategic aims of significant powers. Still, accurate investment decisions are based on rigorous calculations of anticipated earnings and dangers. For the portions of the global supply chains that India wants, it needs to get this calculation right. As a result, sensible industrial policy and investment promotion, like those undertaken by the Make in India initiative, go a long way in improving macroeconomic fundamentals and improving the country’s standing on the ease of doing business index.
What is Contract manufacturing in India? How can it be fruitful for India?
Larger Businesses use contract manufacturing to deal with market demand and cost-effective distribution on a broader scale. As a result of the Make in India initiative, Medium and Small Enterprises within India are likely to benefit significantly. Small and medium-sized businesses (MSMEs) constitute the backbone of a robust national economy. Prioritizing their growth is crucial for the country's future. In India, various companies are getting the benefits of contract manufacturing. It has created several new opportunities for small businesses.
Future of Manufacturing in India
The Manufacturing Sector in India is on the road to becoming internationally competitive. Over the last few years, Indian manufacturers have progressively improved. The unparalleled revamp of obsolete procedures and rules as a result of government initiatives like Make in India, put the subcontinent on the map for global manufacturing. Policies like these are critical to create the best environments for business to develop and compete globally.