#281: 10 Years of Make in India | Summary

Read this 58-sec blog for a comprehensive report on Make in India.

10 years of Make in India - a quick look at what did it solve for India?

Aim: Boost manufacturing + attract FDI + Jobs

A look at successes and pertaining challenges!

The Wins of Make in India 🌟

• Increased FDI
  2014-2023: $600bn+ FDI fueling tech & industrial sectors like IT, Telcom, pharma, automobiles

  

• Manufacturing Growth
  Product Linked Incentive like scheme boosted domestic manufacturing making India 2nd largest mobile phone manufacturer while increasing automobile export.

• Defense Sector Boost
  Indigenization focus led to higher domestic procurement w/ 5x defense exports in 2022

• Infrastructure Development
  Delhi-Mumbai Industrial Corridor, Sagarmala etc. projects aimed to reduce costs & enhance competitiveness with progress in smart cities & industrial zones

  

• India: Export Hub

  $16 billion electronics export by 2022; Key PPE exporter during the COVID-19 pandemic

• Startup Ecosystem & MSMEs
  MSMEs contributed 30% to GDP while benefiting from modernization incentives

  

• Automotive & EV Growth
  Green mobility via PLI for EVs/batteries

• Textile Sector Revival
  $44bn exports in Textile & apparel exports supported by PLI incentives & global investments

  

• Pharmaceutical Manufacturing
  Stronger image as “pharmacy of the world” with vaccine production

The Losses of Make in India ⚠️

• Stagnant Manufacturing Growth
  Manufacturing’s share of GDP remained around 15-17%, below the targeted 25%.

  

• Job Creation Shortfall
  <10 mn jobs created, far short of 100mn goal owing to automation & skills gap

• High Import Dependency
  High import on e-components & Lithium-ion batteries limiting self reliance

  

• Low Private Investment
  Private sector investments lagged, with COVID-19 disrupting supply chains and credit constraints limiting large-scale projects.

• Bureaucratic Delays
  Land acquisition and project approval delays hampered progress, with significant setbacks in projects like the DMIC.

• Underperformance in Key Sectors
  India lost market share to competitors like Vietnam in textiles, and defense imports remain high.

• Infrastructure Challenges
  Logistical bottlenecks and power shortages hinder manufacturing growth, making India less competitive.

• MSME Struggles
  MSMEs faced challenges from demonetization, GST implementation, and cheaper imports, especially from China.

  

• Global Trade Limitations
  India’s withdrawal from RCEP and trade disruptions limited access to global markets and supply chains.

• Skilled Labor Shortage
  Only 2.3% of India’s workforce has formal training, leaving gaps in advanced manufacturing sectors.

  

• Environmental Concerns
  Rapid industrial growth has raised environmental concerns, with inadequate assessments and reliance on coal energy.

• Unmet Renewable Energy Targets
  In 2023, 70% of solar panel requirements were still imported, despite efforts to increase domestic production.

• Limited R&D Investment
  R&D spending remains low at 0.7% of GDP, limiting innovation in sectors like electronics and pharmaceuticals.

Conclusion

Make in India achieved significant progress in FDI, manufacturing, and exports.

However, challenges like job creation, infrastructure, and import dependency persist. Future efforts should focus on innovation, labor shortages, and ease of business to fulfill its potential.

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