In the quest to elevate India to a $35 trillion economy, the manufacturing sector emerges as a linchpin driving the nation’s progress. Recognizing its pivotal role in economic growth, the Make in India initiative was launched in 2014 to foster innovation, attract investments, and position India as a global manufacturing powerhouse.
Over the years, this initiative has ushered in a transformative era, revolutionizing India’s manufacturing landscape and attracting significant foreign investments. From 2006 to 2012, India witnessed impressive growth in the manufacturing sector, with GDP averaging 9.5% annually. However, challenges like regulatory hurdles and low-value addition slowed growth to 7.4% in the subsequent six years.
To address these impediments, Make in India was introduced, focusing on streamlining regulations, enhancing infrastructure, and promoting skill development. One of the remarkable achievements of Make in India has been the surge in Foreign Direct Investment (FDI) inflows. From 2014 to 2023, FDI in manufacturing soared by 55%, reaching $148.97 billion.
Liberalized FDI policies, coupled with initiatives like the Goods and Services Tax (GST) and corporate tax reductions, have bolstered investor confidence and improved the ease of doing business. International collaborations have also played a significant role in driving manufacturing growth.
Partnerships with countries like Japan and Germany have facilitated investments and technology transfers, further enhancing India’s manufacturing capabilities. The Japan-India Make-in-India Special Finance Facility and Make in India Mittelstand (MIIM) program exemplify the success of such collaborations, attracting substantial investments across sectors.
The Production Linked Incentive (PLI) Scheme, introduced by the Indian government, has been a game-changer in promoting domestic production and boosting manufacturing competitiveness. With an incentive outlay of $26 billion across 14 sectors, the PLI scheme has stimulated production, employment, and exports, attracting major players in industries like pharmaceuticals and electronics.
At the state level, initiatives like Tamil Nadu Global Investors Meet and Vibrant Gujarat have further catalyzed manufacturing growth by providing localized support and incentives. Maharashtra, Karnataka, and Gujarat have emerged as top destinations for foreign investments in manufacturing, showcasing the success of state-level initiatives.
As of 2023, India’s manufacturing sector contributes 17% to GDP and employs over 27.3 million individuals. The government’s vision to increase manufacturing’s share to 25% of the economy by 2025 underscores its commitment to driving industrial growth. Looking ahead, sustained focus on innovation, technology adoption, and skill development will be crucial for sustaining manufacturing momentum. Initiatives like the PLI scheme and ongoing reforms to improve infrastructure and regulatory environment will further bolster India’s competitiveness on the global stage.
In conclusion, the Make in India initiative has been instrumental in transforming India into a manufacturing powerhouse, attracting investments, and spurring economic growth. With continued reforms and strategic initiatives, India is poised to realize its vision of becoming a global manufacturing leader in the years to come.
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