Why is Make in India Falling?

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Indian manufacturing hub: A factory floor with machines and workers

The “Make in India” initiative was started in 2014 and Modi’s vision was to make India a Manufacturing hub. We will try to understand the different sectors affected because of this initiative and the challenges faced by the government to succeed in the “Make in India” program.

 

Achievements and Impact of “Make in India” – Simplified

 

  1. Foreign Direct Investment (FDI): India attracted a record-breaking $667.41 billion in FDI between 2014 and 2024. This was made possible by improving the business environment, simplifying rules, and building investor confidence through policy reforms.
  2. Ease of Doing Business: India made a big jump in the World Bank’s Ease of Doing Business ranking, moving from 142nd in 2014 to 63rd in 2020. This progress was achieved by cutting unnecessary paperwork, simplifying taxes, and making it easier to start and run a business.
  3. Growth in Manufacturing: India became the second-largest mobile phone manufacturer in the world. The electronics sector grew significantly, with production doubling from $48 billion in 2017 to $101 billion in 2023. Today, almost all mobile phones sold in India are made locally.
  4. Defence Manufacturing: India showcased its ability to produce world-class defense equipment by building INS Vikrant, its first homegrown aircraft carrier. This marks a major step toward reducing dependence on imports and achieving self-reliance in defense.
  5. Export Growth: India’s exports hit $437.06 billion in 2023-24, thanks to sectors like electronics, pharmaceuticals, and automotive. This shows India’s growing strength as a global trading partner.
  6. Job Creation: The program aimed to create 100 million manufacturing jobs, and while it didn’t fully achieve this target, sectors like textiles and electronics contributed significantly to job creation. However, more work is needed to spread this growth across all industries.

 

Here, you can see the major change or jump that happened in the electronic, Defence, and FDI investments. Questions can come to your mind related to that. What about other manufacturer’s sectors like electronics, textiles, etc? Let’s discuss them in detail.

 

Major Initiatives Under “Make in India”

 

  1. Production Linked Incentive (PLI) Schemes:The government launched PLI schemes to make India more self-reliant and globally competitive. With a budget of ₹1.97 lakh crore, these schemes focus on 14 key industries like electronics, automobiles, pharmaceuticals, and specialty steel. The goal is to attract advanced technologies, boost exports, and encourage large-scale production. By 2024, the scheme has already drawn ₹1.23 lakh crore in investments and created over 8 lakh jobs.
  2. PM GatiShakti:Started in 2021, PM GatiShakti is all about building better transportation and logistics systems to support India’s growth. It connects different modes of transport—like railways, roads, and waterways—through better coordination between 36 government departments. This project is a key part of India’s plan to become a $5 trillion economy by 2025.
  3. National Logistics Policy (NLP):Launched in 2022, NLP aims to cut down the cost of moving goods across the country while improving India’s global logistics ranking. A special action plan under this policy works on improving digital logistics systems, training skilled workers, and standardizing processes. The goal is to make logistics faster, cheaper, and more efficient by 2030.
  4. Building a Semiconductor Ecosystem:Recognizing the importance of semiconductors for industries like electronics, the government started the Semicon India Program with a budget of ₹76,000 crore. It focuses on encouraging local production of semiconductors and displays. Big companies like Tata and Power chip have partnered to set up facilities in India, making the country a stronger player in this critical sector.
  5. Unified Payments Interface (UPI):India’s UPI has revolutionized digital payments, making it easier and faster to pay online. In 2024 alone, UPI handled INR 81 Lakh Crore in transactions within just four months. This system has made India a leader in real-time global payments and played a big role in promoting cashless transactions.

 

Challenges and Future Prospects:

Despite these achievements, challenges persist, such as the need for further improvements in ease of doing business, addressing skill gaps in the workforce, and enhancing infrastructure. The government’s continued focus on reforms and strategic investments is crucial to overcoming these hurdles and sustaining the momentum of the “Make in India” initiative.

 

As “Make in India” enters its second decade, it stands as a testament to India’s determination to reshape its manufacturing landscape and enhance its global standing. With the support of strategic reforms, such as the PLI schemes, PM GatiShakti, and the National Logistics Policy, India has emerged as a competitive and self-reliant economy. The success of indigenous projects like the Vande Bharat trains, the INS Vikrant, and the growing electronics sector signals a promising future for India’s industrial and manufacturing sectors.

 

In conclusion, the “Make in India” initiative has been instrumental in transforming India’s manufacturing sector, fostering economic growth, and positioning the country as a significant player on the global stage. Continued efforts and strategic initiatives will be essential to build upon this foundation and achieve the vision of a self-reliant and prosperous India.

 

Krishna Santosh Varma

Amravati, Maharashtra

MBA-1st Year (G-11)

Universal Ai University