Mr Modi`s flagship Make in India Campaign is 10 years old

Today is the 10th anniversary of India`s flagship Make in India campaign.  The campaign targeted at increasing manufacturing as a share of India’s GDP from 15% to 25%.

Make in India is a priority for Mr Modi to boost manufacturing in India, embedding the country into international supply chains to create jobs and prosperity.

The aim is to attract private investment, including from overseas, to grow the economy and has job creation at its heart.  So, is it working?  Well in short, the answer is yes, over the last 10 years according to statistics India has seen a 135% increase in new jobs created compared to the previous 10-year period (2004 – 2014). 

Recent geopolitics challenges have also created new opportunities for an increasingly confident and assertive India, and the early signs show that India is taking them.   These challenges have caused significant disruption in trade flows and patterns of investment, particularly in manufacturing with geopolitics now topping corporates risk registers.

Companies are reducing their dependence on countries like China as a market for finished goods, as a manufacturing base, and as a source of inputs.

This has led to two inter-related developments that are impacting India and businesses, including UK businesses:

·       De-risking, with manufacturers diversifying their sourcing strategies. Those dependent on, or influenced by, decisions made in China have diversified by contracting suppliers or setting-up their own facilities in other countries; and

·       There is a shift to regional, and arguably more resilient, supply chains rather than global supply chains. We increasingly hear phrases like “re-shoring”, “near-shoring” and “friend-shoring”.

So the question is how can India capitalise on these opportunities and continue to create much needed jobs for the economy?  To answer this India has introduced a wide range of policies and incentives to attract foreign and domestic investment, from production linked incentives (PLI) to tax breaks, which has led to some notable success as the figures above show.

It is, however, a fiercely competitive and changing environment so it`s important that India utilises and showcases its strengths:

·       It is a large and fast-growing market (7% GDP Growth), and just as important is that’s it`s part of the wider high-growth Asia-Pacific region. So, manufacturers that want to sell into India or the wider region, need to also consider manufacturing in India; and

·       India is where companies can access talent, included those needed to do advanced manufacturing and R&D.

I mentioned above Production Linked Incentives (PLI`s) which have been one of the instruments India is using to attract manufacturing investment and jobs to India. Indian Finance Minister Nirmala Sitharaman allocated INR 1.97 lakh crore (£20b) for these incentives across 14 sectors. This initiative aims to create six million new jobs, and produce an additional 30 lakh crore in output over the next five years.

Companies seeking to de-risk from China have been drawn to India by the PLI scheme. South Korean manufacturers were among the first to start building mobile manufacturing in India. Taiwanese manufacturers have also increased their investments in India to boost mobile phone production for the global market. This and other significant investments has led to India's share of global handset production growing from 6% to 16% over the past five years.

It’s a similar story across other sectors including Automotive, Aviation, Food processing and Renewable energy. 

If you’re interested in finding our more UKIBC is launching our new series of webinars “India`s Future Insight” in which we deep dive into key sectors in India to showcase opportunities and trends. Join us for our first session in which we delve into the critical facets of the infrastructure sector in India.

The infrastructure capital expenditure outlay for FY 2024–25 has climbed to US$ 133.86 billion, surpassing the US$ 100 billion threshold for the second time in a row. This will have a positive impact on all sectors in India with new highways, railways, airports, seaports and of course clean energy.

Topic: Revolutionising Infrastructure: Trends and Innovations

Date: 8th October, 2024

Time: 10:00 am- 11:00 am BST/ 2:30 pm- 3:30 pm IST

Registration Link: https://lnkd.in/e5QN5T_Z

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