Make in India Initiative

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MAKE IN INDIA Transforming India into a Business Hub

The study provides you with an overview of the Make in India initiative and the benefits it is going to provide India and the world. It describes the impact Make in India has had on the Indian Economy and the huge foreign investment it has attracted in the recent years. The study also gives examples of some of the biggest companies that have invested in India after the initiative .

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Make in India is a galvanizing call to India’s citizens and business leaders, an invitation to potential partners and investors from around the globe. Most importantly, it represents a complete change of the Government’s mindset – a shift from issuing authority to business partner.

The major objective behind the initiative is to focus on job creation, high quality standards and skill enhancement in 25 sectors of the economy. The initiative hopes to attract capital and technological investment in India. The aim of the initiative is to raise the contribution of the manufacturing sector to 25% of the GDP by year 2025.

Make in India is an initiative launched by the Government of India to encourage multi-nationals, as well as national companies to manufacture their products in India. The Make in India program was launched by Prime Minister Modi in September 2014 as part of a wider set of nation-building initiatives. Make in India initiative was devised to transform India into a global design and manufacturing hub.

INTRODUCTION

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BENEFITS OF MAKE IN INDIA• Boost to India’s Economic growth: The

make in India campaign has increased exports and manufacturing which in turn has boosted India’s economic growth and GDP.

•Increased Employment: An increase in investment will bring employment opportunities for the skilled labor force, around 10 million people are expected to get jobs under the initiative.

•Inflow of FDI: The government has promised to improve the ease of running businesses in India, in keeping PM Modi’s tenet of “Minimum Government, Maximum Governance”.

• Enhancement in Technology: One of the hurdles in the path of development for India is the lack of latest technologies. With myriad of countries coming forth by the Make In India crusade, India will be given with the opportunity to make use of the latest technology these countries bring along.

• Opportunities for the Youth: The brightest young minds move out of the country for a better future which has been the cause of India being deprived of innovative and new ideas. The campaign would give employment opportunities to the youth.www.sandmartin.comIndia- A Business Hub

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• Development of Rural Areas: A factory set up improves a particular area and enhances the quality of life of people residing in that region. Amenities like schools, hospitals and other public conveniences will be developed for the betterment of the public.

• Capital Flow: With the introduction of Make in India, there will be an inflow of foreign currency in the form of investments that will increase the wages, which in turn will increase consumer spending thus benefitting the economy as a whole.

• Reduce Trade Deficit: Manufacturing sector has multiplier effect on Exports which will help the government to wipe off India’s trade deficit. Reduction in trade deficit will stop devaluation of currency and increase sovereign rating and attract more FDI.

• Increased Brand Value: Most of the urban population prefers international brands rather than Indian retailers which results in small manufacturing companies incurring losses. Due to the campaign, companies from around the world will be investing in small manufacturers leading to an increase in brand value of Indian merchandise.

BENEFITS OF MAKE IN INDIA


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•Since the launch of Make in India in September 2014, there have been FDI inflows of $77billion for the period October 2014 to March 2016. This represents about 44% increase in FDI Equity inflows.

•In 2015 alone, India received FDI of $63 billion surpassing both USA and China by a fair margin.

•Between September 2014 and November 2015, the government had received proposals from the interested companies manufacturing electronics in India worth Rs. 1.20 Lakh Crore. Moreover, 24.8% of smart phones that were shipped out in April-June of 2015 were manufactured in India.

Sectors Contribution (Before Make in India)

Contribution (After Make in India)

Automobiles $8 Billion $50 BillionFood Processing $1.43 Trillion $7.21 TrillionRenewable Energy $20 Billion $40 BillionAutomobile Components $10.81 Billion $39 BillionIT and BPM $143 Billion $300 BillionRoads and Highways $14 Billion $57.8 BillionAviation $17 Billion $25 BillionLeather $28 Billion $76 BillionSpace $47 Billion $85 BillionBiotechnology $1.1 Billion $7 BillionTextiles and Garments $67 Billion $100 BillionChemicals $16.8 Billion $70 BillionMining $56 Billion $80 BillionThermal Power $34 Billion $50 BillionConstruction $78.5 Billion $140 BillionTourism & Hospitality $20.36 Billion $21.08 BillionDefense Manufacturing $56 Billion $80 Billion

Pharmaceuticals & Wellness $500 Billion $1 Trillion

Electrical Machinery $54.3 Billion $65 BillionPorts $68.3 Billion $86 Billion

Table below depicts the expected increase in contribution of Make in India campaign on different sectors

IMPACT OF MAKE IN INDIA


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•One of the biggest boosts for Make in India campaign was when aircraft manufacturer Airbus disclosed its plans to raise its Indian Outsourcing to $2 billion and its keenness to manufacture in India.

•Volvo India Pvt. Ltd. has been manufacturing in Bengaluru, India since 1998. It was set up with an investment of about USD 70 million and had expanded by 100% in 2013. Under Make in India Volvo has already invested USD 60 million in doubling their capacity. According to Mr. Kamal Bali, MD of Volvo India, the company aims to create a 360-degree footprint and manufacture in India.

•General Motors Co. has decided to pour in more funds to increase domestic consumption and export. GM plans to invest another $1 billion into the Indian market.

The chart above shows the increase in FDI inflow from $36 billion to $45 billion after Make in India campaign was implemented in 2014.

FDI INFLOW DUE TO MAKE IN INDIAIncrease in FDI Inflow after Make in India


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• Contract Manufacturing giant Foxconn has announced that it has planned to spend $5 billion on factories and research in India. Foxconn is one of the many companies that is looking to target India’s huge consumer base.

• To meet the growing demand, ride-hailing app Uber Technologies has announced that it will invest over $1 billion to build its network in India. India is already Uber’s second largest market in terms of cities served.

•Brazilian Company Perto/Digicon, a high technology and IT Company and the world’s leading manufacturer of ATMs and CDMs inaugurated its first plant in Jaipur, India. The initial investment made by Perto is worth $3.1 Crore and will go up to $6.5 Crore.

Above figures are in $ billions

Transparent Policies & Proactive Reforms under Make in India initiative have made India the most attractive Investment Destination over the past year.

FDI INFLOW DUE TO MAKE IN INDIAInflow of FDI India VS other Emerging Economies


In a short space of time, the obsolete and obstructive frameworks of the past have been dismantled and replaced with a transparent and user-friendly system that is helping drive investment, foster innovation, develop skills, protect IP and build best-in-class manufacturing infrastructure.

Even after so many initiatives by the government the recent rankings released by World Bank on 25th of October, India has moved up only one place in Ease of Doing Business. The government says that many of the reforms it took was after the deadline and will initiate more reforms in the near future

Today, India’s credibility is stronger than ever. There is visible momentum, energy and optimism. Make in India is opening investment doors. Multiple enterprises are adopting its mantra. The world’s largest democracy is well on its way to becoming the world’s most powerful economy.

The story would be complete if Make in India can eventually evolve into Make for India and rest of the world by addressing demands of the Indian marketplace.

CONCLUSION

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SandMartin is a pioneer in delivering outsourced accounting and tax services to accounting firms in the UK, US & Australia. We bring together decades of accounting and financial services expertise, we have the team, the experience and the processes to deliver technically robust and effective solutions. We at SandMartin can help you exploit the opportunities Make in India is bringing to India, with doing business in India getting easier SandMartin can provide you with the Outsourcing services that your business needs. With India emerging as an attractive destination after Make in India, it is imperative to have an offshore virtual team that can help transform your business and give you an edge to stay competitive in the market. SandMartin excels in doing the same.

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