Make-in-India: Can Optimism Meet Realism?
Make-in-India is one of the flagship programs of the current regime which is drawing headlines globally. Is it an ivory tower build around hype or does it have any proximity with reality?
India’s economic growth relies on the manufacturing activity. Sadly this has been one of the weakest points in India’s economic history. In addition to the political and diplomatic factors, flawed policies around manufacturing have doubled roadblocks over the years. In strong contrast at the same time Asia was emerging as a global manufacturing hub where most Indian counterparts like China, South Korea, Tiwan and Thailand, etc, were flexing their manufacturing muscle.
It is only until recently when India realized the power of factories and becoming a manufacturing powerhouse. The realization that it can not achieve its economic goals without increasing the manufacturing capability is a delayed yet positive step. Prime Minister Narendra Modi’s ‘Make In India’ initiative comes as a wake up call and emphasizes on the domestic manufacturing so that at least a part of domestic demand could be supplemented with products made-inIndia. Despite the delays, it comes as a welcome move since it is not an opportunity entirely lost. Interestingly India owns a huge market-base to support a large manufacturing build up in the country.
Banking on Make-in-India
The ‘Make in India’ initiative under the current regime provides impetus to the dormant electronics manufacturing sector in India. In today’s scenario, the problem is much more than just policy. It has moved beyond. To develop a complete ecosystem for electronics manufacturing in India needs willingness from investors and companies alike. As envisioned jointly by the industry and the government, the demand for electronics hardware in the country is projected to increase to $400 bn by 2020. “We have seen a significant hike in the demand for electronic products and all this demand cannot be addressed through imports as this will have large-scale adverse consequences on Indian economy and its balance of payments. Hence the country does not have a choice but to build a solid domestic electronics ecosystem,” opines MN Vidyashankar, President of IESA.
Vidyashankar further outlines that domestic production of electronics has been a major focus of the new government and it recognizes the need to reduce India’s electronics import bill. “Based on the various proposals that have been submitted during the last couple of years, we expect to see increased manufacturing activity. We will see 2016 to be the major wrap up,” adds Vidyashankar.
“The commitment to providing defined timelines for all clearances, and calling for investment proposals and incentives for manufacturing are steps in the right direction and will open up business opportunities for designing products in India for both domestic and global markets,” says Jaswinder Ahuja, Corporate Vice President and Managing Director, Cadence Design Systems India.
There are various product categories where there is a sure business case for making in India. Particularly in the defense electronics where the departments in defense are showing lot of interest. “IESA is playing a key role with regards to transforming those competencies and experiences to the private sector and also to contribute and support the department of defense. There is a considerable interest in the ministry of defense. Automotive electronics is another key sector where there is a high value addition,” says Vidyashankar.