NEW DELHI — Since the inception of the Make in India Initiative in September 2014, India has been reaping the benefits of an increase in Foreign Direct Investment (FDI) and Direct Inward Investment. This is steadily helping establish India as a manufacturing hub. The Initiative is one of the major backbones of the burgeoning economy with 7.2 percent growth forecast for the 2017- 2018 fiscal period.
India’s massive youth population is one of the major catalysts of the success of this landmark policy. The Make in India initiative marks a watershed for the Indian economy.
Despite the mixed reception of Prime Minister Narendra Modi’s demonetization strategy in many parts of India, the economy will still retain positive footing on this front. The campaign also aims to increase globalization further and protect domestic industries, by increasing demand domestically and internationally for goods and services.
The premise of the flagship Make in India Initiative revolves around attracting foreign investment to bolster the position of MSMEs all over India. This coupled with increasing the level of employment will contribute to more growth in the long run.
The initiative is targeting about 25 vital sectors in the economy, with a large scope for growth and development. The underlying goal of the initiative is to ultimately increase the output of the manufacturing sector by a record 25 percent of the annual GDP by the year 2020.
Moreover, recently, the Make in India initiative had a very positive impact on developing bilateral relations between Israel and India. Israel signed a contract worth $2 billion with India to secure supplies of missile defense systems. Integration between the quaternary and business ventures will be in the interests of both countries.
The jewelry sector is also benefitting from the Make in India Initiative as more jobs have been created due to the increase in the demand for labor for diamond cutting and polishing. The jewelry sector churns out exports worth more than $32 billion annually as export value contributes to nearly 95 percent of the overseas market.
Additionally, the Make in India Initiative is creating a burgeoning business ecosystem in many states. Apple is planning on opening its first assembly unit in Bangalore as a way of contributing to the successful Make in India Initiative. Similarly, South Korean car manufacturer Kia Motors also agreed to invest Rs 10,000 crores in the Indian economy.
Uttar Pradesh, India’s largest state, is emulating the example of the Make in India Initiative and making the business ecosystem secure by ensuring that companies comply with regulations so that investors are protected. Additionally, Uttar Pradesh Chief Minister, Yogi Aidhyanathan is aiming to expand and extend banking services to encompass more individuals and communities.
However, it has been difficult to attract investment to some of the key manufacturing sectors like automobiles, pharmaceuticals, chemicals and power. Tourism, trading and hotels are attracting 40 percent more FDI as opposed to manufacturing sectors that are attracting only 14 percent. As a result, the focus is now shifting to a specific few successful sectors. In this way, there is more prioritization and a considerable maximization of resources and output.
It will take the time to bring about distinguishable changes in the many facets of the economy, given the sheer size and scope of the Indian market. The Make in India Initiative is a big step for India and its progressive and steady implementation is emblematic of a great financial future for the fiscal years to come.
– Shivani Ekkanath