10 Years of 'Make in India' - Achievements and Challenges

Launched by Prime Minister Narendra Modi on September 25, 2014, the “Make in India” initiative aimed to transform India into a global manufacturing hub. In its first decade, the program sought to bolster the manufacturing sector, create millions of jobs, and raise the sector’s contribution to GDP. As the initiative completes its 10th year, it is crucial to assess its achievements and challenges.

Objectives of ‘Make in India’

Boost Manufacturing:

Increase the manufacturing sector’s growth to 12-14% annually.
Create 100 million additional jobs by 2022.
Raise the sector’s share of GDP to 25% by 2025.

Global Competitiveness:

Attract Foreign Direct Investment (FDI).
Modernize infrastructure.
Simplify bureaucratic processes.

Focus on Key Sectors:

Initially covered 25 sectors, such as automobiles, textiles, electronics, and pharmaceuticals. In the current “Make in India 2.0” phase, it has expanded to 27 sectors, with renewed focus on technology, infrastructure, and global positioning.

Four Pillars of ‘Make in India’

New Processes:

The initiative identified the importance of ‘Ease of Doing Business‘ to promote entrepreneurship. Reforms included simplified regulations, streamlined processes, and reduced bureaucratic barriers.

New Infrastructure:

The program emphasized the development of industrial corridors and smart cities with modern technology.
Focus was also placed on improving the Intellectual Property Rights (IPR) infrastructure.

New Sectors:

Expanded opportunities for Foreign Direct Investment (FDI) by opening up previously restricted sectors, such as defence and railways.

New Mindset:

The government embraced a facilitative role, partnering with industries to drive economic development rather than merely regulating them.

Key Initiatives in 10 Years

1. Production Linked Incentive (PLI) Scheme: Launched to incentivize domestic manufacturing, reduce imports, and promote self-reliance. Aims to boost advanced technology integration and attract investments in sectors like electronics and pharmaceuticals.

2. PM Gati Shakti: Launched in 2021, it aims to create multi-modal connectivity for a US$5 trillion economy by 2025, focusing on seven key infrastructure engines like railways, roads, and ports.

3. Semiconductor Ecosystem Development: Under the Semicon India Programme, 76,000 crore has been allocated to develop the semiconductor industry, including Tata’s partnership with Taiwan’s Powerchip.

4. National Logistics Policy (NLP): Launched in 2022 to improve logistics efficiency and reduce costs, aiming for a top 25 ranking in the Logistics Performance Index by 2030.

5. Boost in FDI: Reforms in FDI limits, particularly in defence (up to 74%) and insurance, led to record FDI inflows, positioning India as one of the largest global FDI destinations.

6. Skill Development Initiatives: Through programs like Skill India and Pradhan Mantri Kaushal Vikas Yojana (PMKVY), millions of young people were trained to meet the demands of a growing manufacturing sector.

7. Startup India: The initiative helped establish India as the world’s third-largest startup ecosystem, with over 148,931 startups creating 1.55 million jobs.

8. Tax Reforms and UPI: Introduction of the Goods and Services Tax (GST) in 2017 simplified tax processes. Unified Payments Interface (UPI) became a leader in digital transactions, processing transactions worth 81 lakh crore between April and July 2024.

Major Achievements of ‘Make in India’

1. Vaccine Production: India became the supplier of 60% of the world’s vaccines and achieved record COVID-19 vaccination coverage.

2. Mobile Manufacturing: From two mobile manufacturing units in 2014, India now has over 200 units, making it the secondlargest mobile phone producer globally.

3. Defence Manufacturing: The programme has significantly boosted India’s defence production, reducing imports and increasing domestic output, particularly for fighter jets and submarines.

4. Semiconductor Manufacturing: The sector has attracted investments worth 1.5 lakh crore, with five fabrication plants in the pipeline.

5. Railway Infrastructure: The introduction of Vande Bharat Trains, India’s first indigenous semi-high-speed trains, is a key success story.

6. Renewable Energy Growth: India became the 4th largest renewable energy producer globally, increasing capacity from 76.38 GW in 2014 to 203.1 GW in 2024.

7. Steel and Automobile Industries: India became a net exporter of finished steel, while the automobile industry saw a boom in electric vehicle production.

Challenges Faced by ‘Make in India’

1. Slow Manufacturing Growth: The growth rate in manufacturing GVA slowed to 5.5% from 8.1% in earlier decades, impacting overall economic growth.

2. Stagnant Manufacturing Share in GDP: The share of manufacturing in GDP has hovered between 17-18% for three decades, far below the 25% target.

3. Limited Job Creation: Employment growth in manufacturing has not kept pace with output growth, with the sector’s employment declining from 12.6% in 2011-12 to 11.4% in 2022-23.

4. Declining Exports: India’s share of global exports has grown sluggishly, from 1% in 2005-06 to 1.8% in 2022-23, falling short of its potential as an export hub.

Conclusion

As “Make in India” completes its 10-year journey, it has demonstrated significant progress in various sectors, from mobile manufacturing and defence production to renewable energy and semiconductors. However, challenges like stagnant manufacturing growth, limited job creation, and a decline in export share must be addressed for India to realize its full potential as a global manufacturing leader. With continued reforms, investments in infrastructure, and support for innovation, the next phase of ‘Make in India‘ holds promise for even greater achievements.