Introduction to Make in India
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Discuss about the Global Business in Asia for Environmental Factors.
The Make in India concept was initiated by Prime Minister of India, Narendra Modi in 2014 in the month of September. To build the nation against the crisis it was a necessary call to enhance job opportunities and skills by revamping the standards of quality and diminishing environmental factors and most importantly evolving the manufacturing sector of India with respect to its globalization around the world. This creativity became an invigorating call for numerous shareholders and partners business leaders and potential partners globally. It is not just an initiative but more of an inspiring slogan. The national programme provides a portal which will assist the queries and questions and key issues will be addressed which includes infrastructure, labour laws, and skill development. A team of 8 members is formed to take actions on such report (Chandra, 2017).
The main objectives of the initiative are to ensure that the sector whose contribution is around 15% of the GDP of the country to position it to 25% in next few months. The key reason for introducing this programme is to generate 100 million new job opportunities by 2020 and temporary job solutions in the upcoming months. An increase of 8 to 13 % is observed. The e-commerce and internet-related sectors observed a boom of hiring the employees in the particular segments. The refocus on traditional jobs would allow India to create 10 million jobs a year (Pandey & Shukla, 2017).
The concept of Zero Defect and Zero Effect was stated to ensure that the items which are produced without any deformities from the scratch. This concept will enhance the sales volume and the companies can target the large market. The quality of the products will be improved, the cost will minimize and the capital can be infused in other potential areas.
The next objective is to attract the foreign direct investment establish partnerships. The out-dated policies are alleviated from the business environment. This reform is also initiated to improve the positioning of India in the parameter of World Bank’s “ease of doing business’ index. The concept of making in India is entering into the 25 novice sectors to promote the detailed data through the web portal. The allowance of 100% FDI in Defence and Pharmaceutical and Railways has enriched the sector with facilities (Noronha & D’Cruz, 2017).
The government intends the development of smart cities and industrial corridors with high-speed communication and technological advancement. Innovation has been carried out and research activities have been supported by a fast-moving registration system. One more objective is to act as a regulator rather than a facilitator. This can be changed through the paradigm shift in the interaction of the government with various industries. It focuses on acting as a stimulator in the economic progress of the country. Therefore, an initiative of Make in India is a useful step in emerging months, and this initiative looks forwards for a positive impact in the generation of the economy (Nagwal, Sikka, Singh & Narang, 2017).
Objectives of Make in India initiative
Though made in India is an initiative to revamp the manufacturing sector the other sectors which have a possible impact are as follows.
Automobile Sector
- India’s 6th largest sector in the world which is having over 28 million people employed is on the sector which has a huge impact of make in India (Saranga, Mudambi & Schotter, 2017).
- After the implementation of this programme in last past 6 years cumulatively the annual production of the automobile has elevated by nearly 1.5 times and the industry’s turnover has risen by 1.29 times (Gaur & Padiya, 2017).
- India’s propinquity in geographical markets of Japan, Europe, Korea and ASEAN members is a key component in sourcing the automobile components globally.
- For example, an investment of USD 676.416 million in R&D by Ford company in Chennai is soon going to be one of the largest centres in the entire Asia Pacific region. This set up would alleviate the extra costs associated with imports (Majumdar & Rao, 2017).
- The Indian food processing industry covers about 33% of the country’s total food market. This sector is ranked as 5th in India in terms of its production, export, consumption, and growth (Chaudhary, Mathiyazhagan, & Vrat, 2017).
- Its contribution is nearly 14% of the GDP and 6% of the total industrial investment with the implementation of Make in India the food sector received around worth US$ 6.71 billion of foreign direct investment from April 2000 to December 2015 (Srivastava, 2017).
- The potential of the sector says it can attract roundabout US$ 33 billion of investment in upcoming 10 years (Mahajan & Singla, 2017).
- In Asia the third largest [producer of chemical and globally at 6th the chemical industry attracts about 2.2% of the nation’s gross domestic product with anticipated revenues of USD 145 billion (Gaur, 2017).
- An investment worth USD 300.65 to build the largest paint manufacturing plant is done by Asian Paints. The reason this sector is in focus because its welfare can drastically affect the growth rate of the other sectors (Biswas & Croy, 2018).
- The growth rate of the sector was constantly static and the sector grew around 32% in 2005-08. But, the financial crisis of 2008 drastically pushed the growth rate down to 25 %. (Bhattacharya & Verma, 2016).
- The government has analysed the situation and promised to deliver almost approximately 1 Trillions of investment till 2017. (Bhattacharya & Verma, 2016).
- Funds will be acquired from the private sector for about 40% of the amount and 44% of the investment will be utilized in the construction business activities and 22% will be invested to nourish the sector (Shukla, 2017).
- The third-largest foreign exchange earning sector of the country contributed 6.88% of the GDP was 6.88% in 2012-13 (Singh, & Sharma, 2017).
- The government wants to multiply by 7.5% of the existing contributions (Singh, & Sharma, 2017).
- Increase in employment is the pivotal reason for large investment (Bhattacharya & Verma, 2016).
- The IT sector of the country has observed the highest growth since past 5 years in 2015. With the help of the Make in India, the sector has registered the growth of 13.5% (Sharma, 2016).
- The social, mobility, analytics and cloud market grasps 1,50,000 employees. After the initiative, the government is expecting the growth of market up to USD 225 billion by the year 2020.
The objective behind the Make in India campaign was to strengthen the manufacturing sector of the country. Therefore, the campaign focuses on this sector because they found the scope of the employment, growth and the contribution of the sector in the economy.
- The aim associated with the initiative was to make India a global manufacturing hub. This initiative contributed in reducing the waiting period of clearance for the manufacturing projects that create requisite infrastructure. Along with this, it has encouraged the easy way for the business firms to perform the business operations in India.
- The contribution of the manufacturing sector in the economy was restricted to the 15% only but the influence of Make in India initiative increased the contribution by 7.6% in the year 2015-16. This results in the fastest change in the manufacturing sector of the country (Sharma, 2016).
- The employment in this sector increased which contributed in increasing the purchasing power of people.
Department of Industrial Policy and Promotion (DIPP) is in charge of the Investment Promotion, formulation of Foreign Direct Investment (FDI) policy, monitoring of reforms and Facilitation activities, and principally implementing the ease of Doing Business. The partnerships are developed and it was a key component amongst which Department of Industrial Policy and Promotion (DIPP) played an important role. Keeping in mind the necessity to form ley partnerships the policy formulated and implemented the industrial strategies for development in accordance with the national objectives.
- The industrial growth and performance of industries were monitored, the activities assigned to it, in particular, include professional advice on all technical and industrial matters.
- Foreign technology collaborations were encouraged at the enterprise level and policy parameters are innovated.
- Intellectual property rights in the fields of industrial designs, patents, and geographical indications of goods trademarks, and administration of regulations, rules made thereunder (Barnhardt, Field & Pande, 2017).
- Backward areas are promoted with industrial development policies including co-operation from international partnerships.
- Promotion of quality, technical cooperation, and productivity.
- In addition to this, a number of necessary steps have been considered to ease the business structure of the country. E-biz portal is created to address various state and central government services.
(DIPP) Department of the Industrial Policy and Promotion is entrusted to perform the task of monitoring ease of doing business and investment promotion. Investment promotion is a multidimensional and complex process which needs the continuous efforts to promote the ease of doing the business, FDI reforms, fiscal incentives, skill development and infrastructure creation. All these activities are brought in the focus after the introduction of this initiative by the government (Department of Industrial Policy & Promotion, 2018). The government of India has put in place a comprehensive FDI policy regime by carrying more activities under sectorial caps, automatic route, and easing conditionalities. Apart from this, the government has taken the number of measures to ease the business environment of India.
The “Make in India” campaign announced the emplacement of an Investor Facilitation Cell (IFC) at industry chamber Ficci. It is a not for profit organization and a venture between the Commerce ministry, Department of Industrial Policy and Promotion, State governments and Federation of Indian Chambers of Commerce & Industry (Ficci). It acts as a facilitator and will be the first point of reference to support all the primary queries and provide leasing services to foreign investors (Hannah, 2017). The queries can be addressed through the website that was unveiled earlier. The responses of the investors will also be accessed. The team consists of eight facilitators. It works as an Investment Promotion agency in attracting funds and is assisted by the nodal offices in state governments.
The IFC provides all the relevant data and the information to stakeholders across the sectors and globe and takes approvals on behalf of the stakeholders. From the starting to the end this cell will provide the facilitation services. The cell also interacts with other states and feed the investors with policies relating to capital and investment. IFC maintains a dynamic web-portal with all the state government’s policies (Kennedy, 2017). It helps the alignment of meetings of investors with different agencies and departments. This way it becomes easy for the foreign investors to invest in the Indian industries. Below is a chart which shows the attraction of FDI since 2003 to 2015 (Bhattacharya & Verma, 2016).
Benefits of Zero Defect and Zero Effect initiative
The labour laws and reforms in the country is the biggest challenge in the country. Disciplining the workers is such an unusual task which was a major cause of hindrance and the government addressed the out-dated labour’s laws urgently which made the campaign a success.
- Under taxation regime, the introduction of the GST simplified the complex structure of tax collection. After implementation, the tax evasion can be curbed and small taxes are eliminated to avoid the cascading effect. This challenge brought an increase in GDP rate from 7% to 7.5 % (Wang, Hong, Kafouros & Wright, 2018).
- On of, the biggest challenges were also the role of the political hold-ups. Working sessions of parliament were interrupted due to petty issues which delayed the approval of necessary bills related to land and labour. The government-aligned the industries and investors and private companies for a single vision.
- Stringent land laws and inconsistent labour regulations made it difficult to attract the investors. Rural areas were a facing scarcity of basic communication mediums and this came out to be as the biggest challenge.
The progress of the initiative can be measured with the achievement that took place in India under the program of “Make in India”. Below given are details of the achievement: –
- FDI (Foreign Direct Investment): – The FDI inflow was USD 160.79 billion between April 2014 and March 2017 which represents the 33% of the cumulative FDI. On the other hand, in 2015-16, the FDI inflow in the country crossed the USD 50 billion mark in one fiscal year. This took place for the first time ever in India under the programme of Make in India. In addition, according to the IMF, the country is one of the fastest growing major economies in the world (Press Information Bureau, 2017).
- Ease of doing business: – Under the programme, the steps were taken to improve the ease of doing business. This comprises of the rationalization and simplification of the existing rules of business which helps the foreign businesses who are looking for the investment in India. According to World Bank Group’s ‘Doing Business 2018, India jumped a massive 30 place to 100th in rankings of World Bank’s ease of doing business.
- Within the short span of time, the story of success was observed which are listed below. In December 2015, Micromax announced that three new manufacturing units in Rajasthan, Andhra Pradesh, Telangana. A USD 12 billion fund was announced by Japan for Make in India-related projects, called the “Japan-India Make-in-India Special Finance Facility” (Bhattacharya & Verma, 2016).
- A new Research and Development (R&D) campus in Bengaluru was opened by Huawei opened and a telecom plant was set up in Chennai.
- An LH Aviation was signed by the France-based company and a Memorandum of Understanding (MoU) with OIS Advanced Technologies is signed to put up a manufacturing system in India for manufacturing of drones.
- An investment of USD 5 billion by Foxconn was announced for over five years in R&D, this is to create a hi-tech manufacturing facility in semiconductors in Maharashtra (Bhattacharya & Verma, 2016).
- The innovation of Samsung Z1 by Samsung Company in its Noida plant.
- An investment of USD 1 billion by General Motors to begin production of automobiles in the capital state (Bhattacharya & Verma, 2016).
Conclusion
From the above analysis, it can be concluded that the national program was designed to revamp the country into a global business hub because of the list of the attractive proposals for domestic industries as well as industries across the globe. The campaign of Make in India gave India a new shape. The problem the employment and skill enhancement has been improved to some extent.
The sectors involved are automobiles, tourism and hospitality, electrical machinery chemicals, IT, roads and highways , food processing, aviation, space, construction, pharmaceuticals, , defines manufacturing, garments, ports, textiles, media and entertainment, railways, mining, biotechnology, renewable energy, m electronics systems and thermal power.
Foreign investors will enter India to invest more in advanced technologies and capabilities which will automatically increase the opportunities for the youth of the country. The most important factor is the money value in comparison to the value of the dollar will gradually increase. The rigid policies and rules regarding land and labour have been eradicating to solve the problem regarding the infrastructure of the country.
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