Make in India Celebrates 10 Years | 28 Sep 2024

Source: PIB

Why in News?

The ‘Make in India’ initiative, launched on 25th September 2014, completes a landmark decade of empowering India to become a global manufacturing hub.

What is the ‘Make in India’ Initiative? 

• About: The campaign was launched to facilitate investment, foster innovation, enhance skill development, protect intellectual property & build best-in-class manufacturing infrastructure. 
• Objectives: 
  • Increase the growth rate of the manufacturing sector to 12-14% per annum. 
  • Create 100 million additional manufacturing jobs by 2022 (revised to 2025). 
  • Increase the manufacturing sector's contribution to GDP to 25% by 2025. 
• Pillars of ‘Make in India’: 
  • New Processes: Recognized 'ease of doing business' as vital for entrepreneurship, implementing measures to improve the business environment for startups and established enterprises. 
  • New Infrastructure: The government prioritised developing industrial corridors and smart cities to create world-class infrastructure.  
    • It also enhanced innovation and research through streamlined registration systems and improved intellectual property rights (IPR) infrastructure.  
  • New Sectors: Foreign Direct Investment (FDI) was significantly opened up in various sectors including Defence Production, Insurance, Medical Devices, Construction, and Railway infrastructure.  
  • New Mindset: The government embraced a role as a facilitator rather than a regulator, partnering with industry to drive the country’s economic development.  
• Make in India 2.0: The ongoing "Make in India 2.0" phase, encompassing 27 sectors, continues to propel the program forward, consolidating India’s role as a significant player in the global manufacturing arena. 

What are the Major Initiatives Taken to Enable Make in India? 

• Production Linked Incentive (PLI) Schemes: The PLI Schemes aim to enhance domestic manufacturing and boost exports by covering 14 key sectors. 
  • Progress as of July 2024: Total investment reached Rs 1.23 lakh crore and approximately 8 lakh jobs have been generated. 
• PM GatiShakti: It was launched with the aim of achieving a USD 5 trillion economy by 2025. 
  • The initiative focuses on establishing multimodal and last-mile connectivity infrastructure to enhance economic growth. 
  • The initiative operates through seven primary engines: Railways, Roads, Ports, Waterways, Airports, Mass Transport, and Logistics Infrastructure. 
• Semiconductor Ecosystem Development: The Semicon India Programme was approved in 2021 to develop a sustainable semiconductor and display ecosystem. 
• National Logistics Policy (NLP): It was launched to focus on enhancing India's logistics sector through advanced technology, improved processes, and skilled manpower. 
  • Its goals include reducing logistics costs, boosting India’s Logistics Performance Index (LPI) ranking to be in the top 25 by 2030, and developing a data-driven decision support system. 
• Industrialization and Urbanization: The National Industrial Corridor Development Programme is India's flagship infrastructure initiative, aimed at developing "Smart Cities" and advanced industrial hubs. 
• Startup India: It was launched to support entrepreneurs, build a robust startup ecosystem, and transform India into a nation of job creators rather than job seekers. 
  • As of September 2024, India has the third-largest startup ecosystem globally, with 148,931 DPIIT Recognized Startups that have generated over 15.5 lakh direct jobs. 
• Tax Reforms: Goods and Services Tax (GST) marked a significant reform in India's tax system. 
• Unified Payments Interface: UPI processes 46% of global real-time payment transactions, emphasizing its critical role in digital finance. 
  • From April to July 2024, UPI facilitated nearly Rs 81 lakh crore in transactions, reflecting its robustness and increasing consumer trust. 

What are the Major Achievements under Make in India? 

• Global Supply of Vaccination: India achieved record Covid-19 vaccination coverage, powered by indigenous vaccines, and emerged as a leading exporter, supplying nearly 60% of the world's vaccines. 
• Vande Bharat Trains: It is India’s first indigenous semi-high-speed trains, exemplifying the 'Make in India' initiative.  
  • Currently, 102 services (51 trains) are operational, enhancing connectivity and showcasing advancements in rail technology. 
• Defence Production Milestones: The launch of INS Vikrant, India's first domestically produced aircraft carrier, signifies progress in self-reliance in defence.  
  • In 2023-24, defence production reached Rs. 1.27 lakh crore, with exports to over 90 countries. 
• Electronics Sector Growth: India’s electronics sector has expanded to USD 155 billion in FY23, with production nearly doubling since FY17. Mobile phones account for 43% of this production, establishing India as the second-largest mobile manufacturer globally. 
• Export: 
  • Merchandise: It amounted to USD 437.06 billion in FY 2023-24. 
  • Defence Footwear: 'Made in Bihar' boots have been incorporated into the Russian Army’s equipment. 
  • Kashmir Willow Bats: These have gained international popularity, demonstrating India's craftsmanship and influence in cricket. 
  • Amul’s International Expansion: Amul has launched its dairy products in the US, underscoring the global appeal of Indian dairy. 
• Textile Industry Employment: The textile sector has created approximately 14.5 crore jobs, significantly contributing to the employment landscape. 
• Toy Production: India produces around 400 million toys annually, innovating with 10 new toys developed every second. 

What are the Challenges Related to the Make in India Programme? 

• Global Manufacturing Index: As of 2023, India ranked 5th in the Global Manufacturing Index, trailing behind countries like China and the USA, indicating the need for enhanced competitiveness . 
• Manufacturing Contribution to GDP: The manufacturing sector contributed approximately 17% to India's GDP in FY 2022-23, highlighting the necessity for policies that stimulate growth in this area .  
  • However, to reach the goal of 25% contribution by 2025, substantial reforms are essential. 
• Skill Development Deficiencies: The India Skills Report 2024, indicate that around 60% of the workforce in India lacks relevant skills for manufacturing jobs, which hampers the potential growth of the sector . 
• Supply Chain Challenges: The Covid-19 pandemic exposed vulnerabilities in global supply chains, which continue to affect India's manufacturing landscape.  
  • A shift towards localizing supply chains is necessary but remains underdeveloped . 
• Investment Targets: The government set a target to attract USD 100 billion in manufacturing investment by 2025.  
  • As of 2023, only about USD 23 billion has been achieved, underscoring the gap between goals and reality . 
• Innovation and R&D: India's research and development (R&D) expenditure-GDP ratio of 0.7% is very low when compared to major economies and is much below the world average of 1.8%. 

Way Forward 

• Streamlining Regulations: Simplify bureaucratic processes and labour laws to create a more business-friendly environment.  
  • For example, Four labour codes passed in India in 2019 and 2020 are yet to be implemented. 
• Investment in Infrastructure: Upgrade transportation networks and logistics systems to improve manufacturing efficiency. 
• Skill Development Programs: Implement targeted skill development initiatives to address workforce skill gaps.  
  • Countries like South Korea have 90% skilled population rate and India have to work as per industry need.  
• Incentivizing R&D Investment: Promote innovation through increased investment in research and development, including tax incentives. 
• Promoting Local Supply Chains: Strengthen domestic supply chains to reduce dependency on imports and enhance resilience. 
• Enhancing Foreign Relations: Foster trade relations to attract foreign investment and facilitate technology transfer.  
  • Economic Survey of 2023-24 suggests that India can benefit from Chinese investments by attracting FDI from China. 
• Monitoring and Evaluation: Establish a framework for monitoring the initiative's impact to identify bottlenecks and areas for improvement.