What is ‘Make in India’ program?
The Make in India program is an initiative launched to encourage companies to increase manufacturing in India. This not only includes attracting overseas companies to set up shop in India, but also encouraging domestic companies to increase production within the country.
Make in India aims at increasing the GDP and tax revenues in the country, by producing products that meet high quality standards, and minimizing the impact on the environment.
Fostering innovation, protecting intellectual property, and enhancing skill development are the other aims of the program according to the Make in India website.
Why Companies were not manufacturing in India?
Make in India campaign is at loggerheads with the Make in China ideal that has gained momentum over the past decade. China is a major rival to India when it comes to the outsourcing, manufacturing, and services business. India’s ailing infrastructure scenario and defunct logistics facilities make it difficult for the country to achieve an elite status as a manufacturing hub. The bureaucratic approach of former governments, lack of robust transport networks, and widespread corruption makes it difficult for manufacturers to achieve timely and adequate production. The present government has vowed to remove these hurdles and make the nation an ideal destination for investors to set up industries.
Policies under ‘Make in India’ initiative:
There are 4 major policies under the ‘Make in India’ program:
1. New Initiatives:
This initiative is to improve the ease of doing business in India, which includes increasing the speed with which protocols are met with, and increasing transparency.
Here’s what the government has already rolled out
- Environment clearances can be sought online.
- All income tax returns can be filed online.
- Validity of industrial license is extended to three years.
- Paper registers are replaced by electronic registers by businessmen.
- Approval of the head of the department is necessary to undertake an inspection.
2. Foreign Direct Investment (FDI):
Government has done a lot of liberalization in the FDI Policy across sectors which have helped in attracting investments and has improved business environment in the country. With a view to encourage the ease of doing business in India, a number of amendments have been made in FDI Policy recently. The Government is focused to have a FDI policy and regime which promotes investment leading to increased manufacturing, job creation and overall economic growth of the country.
3. Intellectual Property Facts:
The government has decided to improve and protect the intellectual property rights of innovators and creators by upgrading infrastructure, and using state-of-the-art technology.
The main aim of intellectual property rights (IPR) is to establish a vibrant intellectual property regime in the country, according to the website.
These are the various types of IPR:
- Patent: A patent is granted to a new product in the industry.
- Design: It refers to the shape, configuration, pattern, color of the article.
- Trade mark: A design, label, heading, sign, word, letter, number, emblem, picture, which is a representation of the goods or service.
- Geographical Indications: According to the website, it is the indication that identifies the region or the country where the goods are manufactured.
- Copyright: A right given to creators of literary, dramatic, musical and artistic works.
- Plant variety Protection: Protection granted for plant varieties, the rights of farmers and plant breeders and to encourage the development of new varieties of plants.
- Semiconductor Integrated Circuits Layout-Design: The aim of the Semiconductor Integrated Circuits Layout-Design Act 2000 is to provide protection of Intellectual Property Right (IPR) in the area of Semiconductor.
4. National manufacturing:
Here the vision is,
- To increase manufacturing sector growth to 12-14% per annum over the medium term.
- To increase the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
- To create 100 million additional jobs by 2022 in manufacturing sector.
- To create appropriate skill sets among rural migrants and the urban poor for inclusive growth.
- To increase the domestic value addition and technological depth in manufacturing.
- To enhance the global competitiveness of the Indian manufacturing sector.
- To ensure sustainability of growth, particularly with regard to environment.
Make in India Example:
- Xiaomi has partnered with Foxconn to manufacture smartphones in India. The factory is based in Sri City, Andhra Pradesh and the choice of location is strategic as Andhra Pradesh is known to have highly skilled technical manpower, an enterprising population
- and a dynamic emerging leadership – a combination of factors that make the state appealing to high-growth technological companies such as Xiaomi.
- HCL along with the Consulate General of India, Frankfurt organised a networking session and panel discussion in Frankfurt on May 28, 2015. The event was aimed at showcasing German financial service institutions about data regulation in India and capabilities of Indian service providers in the domain. At the event, the address by Consul General Mr. Raveesh Kumar highlighted how current reforms have improved the state of affairs and have created new opportunities for the German financial sector. In this context, he also underlined Government of India’s commitment to create supportive settings where global corporations are extended complete cooperation. The Keynote address was delivered by Mr. Jan Schneider, Deputy Mayor & Head of Department for Reform Projects, Citizens’ Service and IT, City of Frankfurt wherein he discussed the policy objectives that drive the European data security framework and data protection reforms that will benefit German businesses. Dr. Peter Pop, Head Financial Services, Continental Europe, HCL Technologies addressed the role, Indian Service Providers are playing in supporting leading financial service firms across the globe and how they comply with changing regulations. The highlight of the event was a panel discussion on ‘Indian IT – conforming to global data protection standards in the financial sector’ with panellists like Ashutosh Kumar, Chief Business consultant SAP, Armin Weyell, Partner KPMG and Prof. Dr. Igor Podebrad, Director, Group Chief information Security officer, Commerzbank AG. The ‘Make in India’ event was attended by participants representing Banks, Insurance companies, Capital Markets and Financial institutions and is the flagship programme of the Indian government designed to facilitate investment and foster innovation in twenty-five priority sectors identified for attracting foreign collaboration and investments.
Problem faced by ‘Make in India’:
The main challenge is to make India the easiest and simplest place to do business. For that purpose investment has to be done in skill development and Government has to bring reforms in the age old labour laws and make it consistent with labour laws existing globally. Skilled labour force is mandatory and in India only 12% of India’s population is skilled. Again, environmental clearances and land acquisition have always been a contentious issue for many projects.
Also, the Government has to relook at the existing taxation system in the country because it should be economically feasible to manufacture a commodity in India, rather than importing the parts of a particular commodity from another country, which enjoys comparative advantage in its production, and just doing assembling jobs in India under the garb of Make in India.