Make In India – Initiatives, Aims, Advantages & Challenges



"Make In India” is one of the dream children of our Prime Minister Narendra Modi. Uttishta Bharata known for developing patriotism and awakening the youth came up with a unique idea to support this and organized a seminar “Make In India – A Dream Come True for Young Entrepreneurs”.

Make in India is an initiative program of the Government of India to encourage Multinational Companies and domestic companies to manufacture their products in India. It was launched by Prime Minister, Narendra Modi on 25 September 2014. 

Prime Minister Narendra Modi launched the Make in India program on 25 September 2014 in a function at the Vigyan Bhawan.] On 29 December 2014, a workshop was organized by the Department of Industrial Policy and Promotion which was attended by Modi, his Cabinet ministers, chief secretaries of states and various industry leaders.

E-Government is committed to chart out a new path wherein business entities are extended red carpet welcome in a spirit of active cooperation. Invest India will act as the first reference point for guiding foreign investors on all aspects of regulatory and policy issues and to assist them in obtaining regulatory clearances. The Government is closely looking into all regulatory processes with a view to making them simple and reducing the burden of compliance on investors.

The „Make in India‟ initiative also aims at identifying select domestic companies having leadership in innovation and new technology for turning them into global champions. The focus will be on promoting green and advanced manufacturing and helping these companies to become an important part of the global value chain.

The Government has identified 25 key sectors in which our country has the potential of becoming a world leader. The Prime Minister will be releasing separate brochures for these sectors along with a general brochure. The brochures covering sectors like automobiles, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways among others will provide details of growth drivers, investment opportunities, sector-specific FDI and other policies and related agencies.

Since the new Government took over, a series of initiatives have been taken to revitalize the industrial sector in the general and manufacturing sector in particular. To mention a few:

The process of applying for an Industrial License and Industrial Entrepreneur Memorandum has been made online on the e-Biz website 24*7

A a vast number of Defence items have been de-licensed;

The validity of Industrial License has been extended to three years;

With a view to providing flexibility in working hours and increased intake of apprentices for on the job training, the Government has decided to amend a number of labor laws;

An advisory has been sent to all Departments/ State Governments to simplify and rationalize regulatory the environment which includes: online filing of all returns in a unified form; no inspection without the approval of the Head of the Department, etc.

 In August 2014, the Cabinet of India allowed 49% foreign direct investment (FDI) in the defense sector and 100% in railways infrastructure. The defense sector previously allowed 26% FDI and FDI was not allowed in railways. This was in hope of bringing down the military imports of India. Earlier, one Indian company would have held the 51% stake, this was changed so that multiple companies could hold the 51%. 

FDI Inflows :

M-o-M FDI Inflows increased from USD 1.4 bn in June 2013 to USD 1.9 bn in June 2014 recording an increase of 33%

Foreign Direct Investment inflows have increased 75% in the months of June-July 2014(combined) over the same time period in the preceding year.

Out of 25 sectors, except for Space(74%), Defence(49%), and News Media(26%), 100% FDI is allowed in the rest of the sectors. Between September 2014 and August 2015, the government received ₹1.10 lakh crore (US$17 billion) worth of proposals from companies interested in manufacturing electronics in India. 24.8% of smartphones shipped in the country in the April-June quarter of 2015 were made in India, up from 19.9% the previous quarter.

The major objective behind the initiative is to focus on 25 sectors of the economy for job creation and skill enhancement. Some of these sectors are automobiles, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways, design manufacturing, renewable energy, mining, biotechnology, and electronics. The initiative hopes to increase GDP growth and tax revenue. The initiative also aims at high-quality standards and minimizing the impact on the environment. The initiative hopes to attract capital and technological investment in India.

Recently the Foreign Direct Investment policy has been liberalized. 100% FDI under automatic route has been permitted in construction, operation, and maintenance in specified Rail Infrastructure projects; FDI in Defence liberalized from 26% to 49%. In cases of modernization of state-of-art proposals, FDI can go up to 100%; the norms for FDI in the Construction Development sector are being eased. The government is committed to improving the physical infrastructure. Development of dedicated freight corridors and investment in improving our ports and airports are underway. These corridors would house Industrial agglomerations along with smart cities. The private sector would be playing a significant role in these developmental works. For the manufacturing sector to take advantage of the improved physical infrastructure, the need for having strong human capital is recognized. The government ‟s effort would be to equip the working-age population with the right kinds of skills so that the manufacturing sector finds them employable. One of the first decisions that the new Government has taken is to set up a separate Department of Skill Development and Entrepreneurship. 


The manufacturing sector led the growth of nominal and per capita GDP. While India ranks 7th in terms of nominal GDP, it ranks a dismal 131st in terms of per capita GDP.  

Employment will increase manifold. This will augment the purchasing power of the common Indian, mitigate poverty, and expand the consumer base for companies. Besides, it will help in reducing brain drain.

Export-oriented growth model will improve India's Balance of Payments and help in accumulating foreign exchange reserves (which is very important given the volatility in the global economy with multiple rounds of Quantitative Easing announced by major economies).

Foreign investment will bring technical expertise and creative skills along with foreign capital. The concomitant credit rating upgrade will further woo investors.

FIIs play a dominant role (relative to FDI) in the Indian markets. However, FIIs are highly volatile in nature and a sudden exodus of hot money from India can effect a nosedive in the bellwether indices. Make in India will give an unprecedented boost to FDI flows, bringing India back to the global investment radar.

The urge to attract investors will actuate substantial policies towards improving the Ease of Doing Business in India. The Government of the day will have to keep its house in order (by undertaking groundbreaking economic, political and social reforms) to market Brand India to the world at large.


From a theoretical perspective, Make in India will tend to violate the theory of comparative advantage. If it is not economically feasible to manufacture a commodity in India, it is best to import the same from a country that enjoys a comparative advantage in its production. International trade, after all, is welfare augmenting.

Reiterating the point made by Dr. Raghuram Rajan, India, unlike China, does not have the time advantage as it undertakes a manufacturing spree. The essential question is - Is the world ready for a second China?

Make in India will lead to an unsustainable focus on export promotion measures. One such measure is artificially undervaluing the rupee. This will have devastating consequences for the import bill.

Relative neglect of the world economic scenario may not augur well for Make in India. With the US and Japan economies yet to recover from their economic crises and with the EU floundering, one needs to be wary about the demand side of Make in India. The clairvoyance of the incumbent RBI governor to Make for India should be put to good use.

Make in India is intended to make India a manufacturing hub of the world (at least Asia, for that matter). The idea

was to increase the contribution of the manufacturing sector to India's GDP.

To accommodate the 300 million people who will join India's workforce between 2010 and 2040, each year 10 million jobs are needed. The thrust on the manufacturing sector will create about 100 million jobs by 2022. 

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