From Red Tape to Red Carpet


Make in India is an initiative of the Government of India to encourage international and domestic companies to manufacture their products in India. It was launched by Prime Minister Narendra Modi in September 2014. We asked Mrs. Kamini Issar-Ernst, Senior Director at FICCI (Federation of Indian Chambers of Commerce and Industry) and its Representative in Germany for more information. In the following text she's explaining the goals and the essentials of this campaign.

Since its liberalization in 1991, India has experienced a major transformation in its political and economic scenario to become one of the most    important emerging markets in the world. The combination of a large domestic market, low cost raw materials, and competitive skilled labour and the ability to successfully do frugal engineering, boosted the GDP of India from USD 274 billion in 1991 to USD 2 trillion in 2014. Additionally, the ‘Demographic Dividend' of India will result in the country to have the world's largest workforce with 62% of the population of working age along with the world's youngest population, with 65% under the age of 35. These factors present huge opportunities for businesses across all industries.

The ‘Make in India' campaign is the Hon'ble Prime Minister's flagship program to develop a robust manufacturing sector in India. The campaign has a target to increase the share of the manufacturing sector of India to 25% of the GDP by 2022. In addition, the campaign provides investors – both domestic and overseas – a conducive environment to manufacture in India and at the same time creates job opportunities. The campaign has identified 25 key sectors for promoting investments, some of which recently liberalized Foreign Direct Investment (FDI) policies such as Defence, Construction, Automotive, Electronics and Renewable Energy.  More importantly, ‘Make in India' represents an attitudinal shift in how India relates to investors: not as a permit-issuing authority, but as a true business partner.

The key pillars of ‘Make in India' are: "New Sectors" - in November - 15 new sectors with liberalized FDI norms were announced. Additionally, key highlights include - opening up 100% FDI in railway infrastructure, medical devices, and telecommunications industries. Secondly, "New Processes"- Making it easier to do business in India which includes streamlining regulations like reducing the paperwork required for imports or exports from 11 to 3. Additionally, other recent initiatives include no minimum requirement on capital and common seal. Another important measure is the creation of the ‘eBiz portal‘, which allows investors to obtain 14 different approvals all-online. The third pillar is "New Infrastructure". Smart Cities as a project aims to provide world class Infrastructure to businesses with key projects being the 100 Smart Cities initiative, with an amount of USD 150 billion dedicated to roads and ports. Furthermore, the creation of Industrial Clusters and Special Economic Zones with favourable incentives as well as Industrial Corridors will greatly reduce logistics costs across the country. The fourth pillar is around "New Mindset" – a change in the mindset of the government from red tape to red carpet. A measure to change mindset is the establishment of an Investor Facilitation Cell (IFC) in Invest India that assists investors with setting up businesses in India. The IFC provides assistance for all sectors and geographies in India. The unit is rapidly expanding its services to offer an in-house research unit, investor targeting unit among other new service offerings that will help hand hold investors through the investment life cycle.

Since its launch in September 2014, the ‘Make in India' campaign has been an overwhelming success. India received USD 31 billion of FDI in 2015 of which manufacturing accounted for 46% of all FDI. Additionally, USA, France, UK, China and Japan have announced to invest a total of USD 70 billion in India over the next 5 years.

The success of the ‘Make in India' campaign was also reaffirmed by the Financial Times and Ernst & Young, rating India as the ‘Best Investment Destination of 2015' and the ‘Most Attractive Investment Destination in 2015'respectively.

In conclusion, the great opportunities paired with the new mindset of the government through the ‘Make in India' campaign are poised to make India one of the most attractive investment destinations in the world and a global manufacturing hub.


Further links:

» The official website of the government initiative "Make in India"

» Ernst & Young: India Attractiveness Survey 2015

» Financial Times: India Grabs Investment League Pole Position in 2015

» Boston Consulting Group: Make in India: Turning Vision into Reality