Exactly a year ago, Prime Minister Narendra Modi launched the Make in India initiative to improve investor confidence by presenting the country as a global manufacturing hub.
On the first anniversary of the signature programme, Modi is in the US seeking to improve bilateral ties, and wooing companies to invest more in India.
Though a substantial number of investments have been committed in the last one year and the government has taken several steps to improve ease of doing business in the country and cut down on red-tape, analysts said a lot of bottlenecks still need to be removed.
Global manufacturing powerhouses, including Japan and China, have responded positively to the campaign. While Japan has committed an investment of $35 billion in over a five year period, China has expressed interest to pump in $20 billion in the country during the same period.
There has been a 48% rise in FDI in India during October 2014 to April 2015 against a year ago.
“Make in India has been well received by the industry, both in India and abroad, and has started yielding results,” Ficci secretary-general A Didar Singh said.”
According to the Centre for Monitoring of Indian Economy, investment projects worth Rs 63,172 crore were completed in the manufacturing sector in April-June 2015, highest since January-March 2010 quarter.
However, there’s still a long way to go.
“The government definitely needs to be applauded for its ‘Make in India’ approach,” said Dhiraj Mathur, executive director at global accounting and consultancy firm PwC. “But more reforms are needed to boost the actual spirits of the programme. For example, defence has huge potential to convert India into a manufacturing hub and power has a missing role to plug the leakages in the distribution network, which will encourage industries to set up more manufacturing plants in hinterlands,” he added.
“A lot of Make In India would actually be seen on ground once the ease of doing business increases at states’ level,” an analyst said. “A lot of states, which have inbuilt capacities, remain untapped.”
Citing an example, he said, a number of global manufacturers are scouting for land in India but poor acquisition laws are proving to be hurdles. “Take the example of Posco, which is facing land and environment regulatory issues. It has stalled the growth of the steel sector over several years,” the analyst added.