"Vocal for Local"
The first version of Make in India turned India into an assembly hub, particularly in industries such as mobile phones and other consumer electronics. However, the focus with Make in India 2.0 (launched in 2018) was localizing the supply chain. During the COVID-19 pandemic, shortages in parts, components, and materials drove the government toward recognizing the need to become self-reliant paving the way for Aatma Nirbhar Bharat Abhiyan Packages (Self-reliant India mission). Within this framework, the Production Linked Incentive (PLI) provides incentives for sales of domestically manufactured products.Presently, the Make in India initiative focuses on 27 key industries under the manufacturing and services sector including automotive, electronics system design manufacturing, pharmaceuticals, roads, food processing, and renewable energy among others. The government further modified public procurement norms to give preference to companies whose goods and services have 50 percent or more local content. India successfully achieved its export target of 30 trillion Indian rupees and and recorded the highest-ever FDI inflow in the financial year 2022 which dropped to around 71 billion in the succeeding financial year.
Roadblocks and challenges
The trajectory of the Make in India initiative has not been without hurdles. The government’s move to raise tariffs on several products to shield the domestic industry was deemed trade protectionism by critics. Furthermore, a daunting bureaucracy, lagging infrastructure, and red tape have been the long-standing hurdles in the way of the country’s dream of becoming the new factory of the world. Although FDI has doubled since 2014, most investment has been directed toward services and computer technology. In terms of manufacturing, there has been a lack of investment in recent years. The manufacturing sector’s share of the Indian GDP stood at merely 13 percent in 2022, the initial target being 25 percent by 2022, which is now extended to 2025. Many multinationals are adopting the “Plus One” or “China Plus One” strategy to reduce their reliance on manufacturing solely in one country. As companies like Boeing, Google Pixel, Dell technologies, HP Inc. and Apple turn to India, India’s manufacturing and infrastructural capabilities will be put to test in the coming years.
