Make in India is an initiative launched by the Government of India (GoI) on the 25th of September 2014. The thought process behind this idea is that India needs to step up its manufacturing game, for every successful self sustainable country has a strong industrial base. The concept is indeed a noble one. On the surface, it looks like it should generate a lot of employment, open up new entrepreneurial opportunities and overall enhance the skills of the workforce to create a sustainable long term workforce but on deeper digging, apparently it isn’t all flowers and sunshine.
The campaign focuses on attracting Foreign Direct Investment (FDI). The basic concept is that a foreign company will invest money and technology in India, give proper skill training to the people, employ them and have a manufacturing base here. Historically, foreign players have been very vary of investing in India. This is primarily because of the License Raj up untill 1991-92. Even after the opening up of the economy, the bureaucracy has been so slow that you need to wait months, sometimes even years on end to obtain work permits and get all the papers sorted for your business. With this campaign, however, it has been made easier to obtain licenses and any investment of money is hugely encouraged and easily facilitated by the government.
The real problem begins at the stage of implementation of the invested money in the right areas. We as a country have a huge deficit in the area of machinery and energy. Even large industrial areas face regular power cuts. Any specific heavy machinery has to be imported. This exponentially increases the lead costs and delays the break even point while giving the real profits in the hands of the foreign players.
Another point to be noted is that the money invested will definitely be pulled back after sufficient profits have been made. Once these companies pull out, we will once again have a pool of now educated and skilled workers discontented by the lack of job security and government apathy. In essence, this FDI money is just a soft loan.
These are some really worrying problems and the pain taken for the whole campaign doesn’t really seem worth it, yet, there can be a solution to this. While we do import technology and machinery, the Make in India campaign can encourage domestic players too to learn the technology and become self sufficient, and it could mandate the foreign companies for sufficient knowledge transfer, after all we are paying the price in terms of land, infrastructure and workers to these companies.
Proper diversification of all the sectors is also necessary. The campaign focuses chiefly on 25 sectors including aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery and electronic systems etc. but the only sector that has significantly attracted any interest is electronics. The fact that most jobs today are being created in the IT and electronics industry can be attested to this. The government needs to take enough steps to attract investment in other areas as well.
The seed of the campaign was sown only 3 years ago. It will take some time before the tree begins bearing fruit. As is the case with any new business, the start up costs are always high and turning a profit always takes some time. The same is the case with Make in India. Initial cold start problems are being seen and discussed, and unless these problems are sorted out, the campaign will indeed be a failure.
In conclusion, while I wholeheartedly support the idea of Make in India as I’m a firm believer that a country needs to have an extremely strong manufacturing base (just look at the US or UK) to be taken seriously in the international scene, I am also vary of the fact that unless properly protected with robust policies, our domestic economy will take a hit. Out of the 200 people in my mechanical engineering class, only 40-50 have started working, even then most of them are working in unrelated sectors. If there has been increase in employment because of this campaign, I simply do not see it. I can only hope it does bear fruit for us the youth in the future.
Unemployment is also a major reason why yours truly is blogging for you.
If you want me to write on a particular topic, please do contact me. We can also collaborate if you like.
Much love,
–SG
Through your article only I came to know about somewhat a deeper look into this reform. I think only revolutions take place in a day, reforms take their time and so it will as well. Lets be positive that it even got initiated to such a scale.
Thankyou for such a resourceful information. It always helps. 😊
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Thanks. Your comment gives me a lot of encouragement. 🙂
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A very good and ‘relevant to the times’ post. I would think that this movement is nothing g but eye wash
Apart from all the infrastructural problems you’ve pointed out, there’s also the matter that India, ow being a signatory to the WTO and its various agreements and conventions, cannot close its doors to trade foreign products, and only allow FDI. That goes against the ‘Free Trade’ rule. Besides, we have become so dependent on foreign brands and products that now its difficult to see a sudden shift in loyalties. It will take time, and money and lots and lots of perseverance from Indians from every walk of life.
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Foreign products aren’t the problem, lack of domestic alternatives is.
You’ve really pointed this out so thoughtfully that we’ll need time and perseverance.
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And you’re right on posting out that we don’t have domestic alternatives here. Thank you for a great read
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The shining gem can see shine in the darkest corner, that’s what I like about your writing, very well weighed pros and cons always and end with a positive assertion that makes you a leader S.G.
I don’t think failing is the right word though , I would say half hearted may be. there were ads on television saying do not buy Chinese lights, its diwali time, I mean who would not buy.. Cheap,looks good. .( you ask me, I won’t buy though), give us better option, make some in India.to sum it up I say let’s be positive
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You’re right Jayshree. It isn’t the fault of people that buy cheaper Chinese products. The real problem is that we don’t have similarly priced option of our own to compete. That needs to change
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Yes my friend, that’s a different thing I do give two bad words to the reatiler selling it😂😂😂
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Very interesting read .. make in India or we see much textile made in India, here in North America. Not as much as Made in China but not far away. There was a time that Canada had a huge textile industry and everything we bought was either made here in Canada or the United States. Labour costs were so high that companies started to contract the work to china Mexico and India. This lead to a high unemployment rate and many loss of jobs. As much as the people not all but a few look for made in Canada labels, there are not many and the ticket price fits in a high cost. Designer companies were the first to find a way to make their products low cost and hit a high profit margin. In my opinion this is good for India, but not that great for the countries whom are sending out their contracts. In any case there is always money to be made. The fabricant and the distributeur is always win win. But the people are the ones who pay the price. In politics as much as you hear for the people keep in mind they are not talking about the lower class! The people are the elites! Those who control, those who have the power! Sad but this is it. Reality which many don’t seem to see or understand. And on a final note Yes India should welcome this campaign and make the most of it for as long as it can.
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This whole set up only means one thing. People in the US losing jobs, people in India getting underpaid in their jobs, while the real money is pocketed by the large corporates. I hope you see my point. This initiative, in concept, also lobbies for smaller businesses to get a piece of that sweet sweet manufacturing money, while inviting money from the foreign players. A lot of arbitration is required to properly understand this and make sure the interests of such small scale people are protected.
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In my opinion, the government needs to be proactive in its efforts to increase the growth in manufacturing sector. Rather than putting its heft behind FDI, Indian startups need to be in the limelight. Sure, foreign investment brings in the big bucks, but there is always the risk of them pulling out once they have their profits. While promoting homegrown startups isn’t as shiny and doesn’t make for great fodder for news, and they can’t compete with global brands, but the results, though slow, will be beneficial to the country. That is what India as a country needs, not more foreign investment, but more Indian startups building great quality products here.
Also, with regards to your unemployment, make sure you don’t make the same mistakes I did. 😅
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Hey Akhil, thanks for commenting brother! Your point of view is pretty clear, but I don’t think the government would pay much heed to it, as they want sensationalizing news items to further their political agenda. You know how life is, the best ideas are usually swept under the rug.
Also, you have GOT TO tell me how to insert a hyperlink in a comment like you did, you just HAVE TO. PLEASE!!
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Yes, indeed, FDI makes for better news headlines than simply investing in homegrown startups. Adding links in is easy. Write in the words you want and you’ll be set. Do note that the link has to be inside the ” “.
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All right, let me check. What do you see?
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A link on the word ‘see’ to your blog’s homepage.
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Excellent!
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I guess the main reason for cons of this scheme, is people don’t rely much on Indian companies. One incident was I remember was of Freedom 121 (not sure of name). Many people ordered it because the phone costed bout 300 only, but it later turned to be a fraud. Many people didn’t get refund also for it.
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Freedom 251 was a classic example of “if it seems too good to be true, it probably is”
There are a lot of reputable Indian companies, reliance, Tata, godrej, Hamara Bajaj, Maruti, Hero only to name a few. What the impetus should be is on the small and medium scale industries and also to weed out such frauds like you’ve mentioned.
Thanks for commenting too, I always appreciate your comments on my posts. 😊
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The feeling is mutual☺️
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A very deep information. Got to know something new today..
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Thank you Panchali. 😊
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Yeah.. Something foreign
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Interesting analysis. But all this clamor of opening the coffers doesn’t seem like a viable option. We have reigned in fiscal deficit after so many years of discipline. we cannot simply splurge as inflation is also rising. May be we can use some of the dollar reserves which are lying idle with US. We have over $ 400 Billion of foreign reserves which are sitting idle. Probably it can be used to give Make in India a Push but Government should resist the temptation to splurge and as such we are a 2 Trillion dollar economy and a mere 50000 crores won’t revive the animal’s spirit. Also some relief has been provided to exporters, let’s see how much it works. Our exporters need some relief in form of taxes and duties. Same needs to be provided. Also these reserves will push investment into our debilitating infra.
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Yes, these are some key issues that need to be addressed if Make in India is to be successful. Just promises of achchhe din won’t cut it now.
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Yes it is
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That was a very fair, in- depth and thought provoking analysis of the scenario.
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Thank you Radhika ma’am. 🙂
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Noted the new title “ma’am”. 😉
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Yeah it sure is..
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A knowledgeable post👍
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Thank you Aethist. 🙂
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I like if u call me Shayra or gargi rather than be called Aethist.
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Okay Gargi ji, understood. 🙂
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That’s better😊
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Nice. I pray this ” Make in India” turns out pretty well for you all.. Much love
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Pointed out all the pros and cons. Great post. Knowledgeable one. That’s a whole different look at the things.
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Thank you Urvashi. Means a lot to me. 🙂
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