‘Make In India’ the Prime Minister Mr. Narendra Modi’s flagship programme has made India a new global manufacturing hub in the world. An initiative, which was launched in September 2014 has brought many changes on the ground and industries have already experienced the same through various policy changes.
The aim of the programme is to make India a new manufacturing hub, promote as an investment destination, design and innovation centre for the manufacturers and create a huge number of jobs in the manufacturing industry by keeping the aim of ‘No-defect, No effect’ so that the country made goods and products can be sold across the globe.
Prime Minister wants to accelerate the manufacturing activities in the country and wants more contribution from the manufacturing sector to national’s GDP, which is idle between 15 to 16 percent for a very long time. His government aims 25 percent in near future. However, the service sector contribution to GDP is 57 percent. The gap between manufacturing and service to the economy is huge, which need to be improved.
To bring foreign companies to India to manufacture their products in the country, the government has changed various policies and made changes in foreign direct investment (FDI) limit in various sectors. In the budget 2016-17, government of India has given utmost priority to the ‘Make In India’. Finance Minister Mr. Arun Jaitley simplified excise and customs duties to improve competition and trim down the manufacturing costs.
In November 2015, government had changed FDI norms in almost 15 sectors, like manufacturing, defence, civil aviation, construction development, banking broadcasting and others. Previously FDI in defence was allowed only 26 percent, which now increased to 49 percent; the change in FDI limit for this sector would help decrease the military imports. This impact will be seen from across the sector. Such initiatives have resulted in attracting more foreign investment through FDI in the country since the ‘Make In India’ launched in September 2014. As per the Commerce and Industry Minister Nirmala Sitharaman written reply to the Parliament, FDI limit had increased by 29 percent during 15-month period till December 2015 since the programme launched.
Recently, in an interview with Economic Times, Amitabh Kant, secretary, Department of Industrial Policy and Promotion said, country’s manufacturing growth has jumped to 12.6 percent from the time this campaign launched and claimed India has been ranked number one investment destination by various agencies. He further claims, companies like JCB, Volvo, Hyundai, Ford, Maruti Suzuki and Cummins had come looking for Indian market, but now these companies using India as a major exporting hub.
‘Make in India Week’ which was held in Mumbai in February this year has received more than Rs 15.2 lakh crore investment as claimed by DIPP Secretary Amitabh Kant. The event attracted government delegations and business team from various countries and also attracted 2500 foreign and 8000 domestic players involved in different sectors. Maharashtra was highest receiver (8 lakh crore alone) of investment during this event.
Vipin Sondhi, MD & CEO, JCB India told Business News paper ‘MINT’ in an interview that the industry is experiencing healthy dialogue with the government and there is always the possibility for improvement from the government side. Since ‘Make In India’ campaign initiated, we have been noticed serious effort from the government on the way to creating a strong manufacturing atmosphere.
In the construction equipment manufacturing sector, JCB India is exporting its equipment to more than 60 countries of Africa, Middle East, Latin America and South East Asia and JCB India get around 20 percent its revenue from export. This is the sign of Made in India equipment are also getting exported across the globe.
Volvo has also planned to invest another Rs 500-700 crore for production of construction equipment, trucks and buses in India.
It is estimated that the current construction equipment market is USD 2.8 billion and expected to grow to USD 5 billion by 2020, in which many existing and new players are going to get benefited under ‘Make In India’ programme. As huge infrastructure works which are taking place in the country require construction equipment to meet domestic demand. Many companies may invest more or set up a new plant to save production cost as they can get a cheap labour market in India.
Source: Information in this article has been obtained from various sources, like the Ministry of Commerce, Economic Times, Mint Live, and statements of prominent people covered by national media.