Now there are not many people outside of India that will have heard of the campaign ‘Make in India’ but it was launched by the Narenda Modi government in October 2014. A year later and India has moved up 12 places in the world bank ratings (no idea why that is important) from 142 to 130. Now to me that doesn’t seem very impressive at all but the Modi government in February 2016 used this move to attract fresh investors in Mumbai through the Make In India Week. Bengaluru also had a foreign investment congress at the Palace grounds – it brought the already bad traffic to a virtual standstill. What an advert!
Now I am no economist but when the newspapers report exports slipping for over a year, firms posting lower sales and profits, jittery markets due to the global oil prices and state owned banks showing losses due to provisioning for bad loans – the future doesn’t look rosy. Global firms are consolidating too. In November 2014 Nokia shut down its plant in Chennai after being bought by Microsoft.
On top of that, India has to deal with the lack of equality for women, women’s safety, pollution (not one of the lakes in Bangalore is safe to swim in), corruption and the ‘intolerance’ towards whole sections of society. Sounds like an attractive place to invest right?
The Government ignores these concerns and showcases its achievements since the Make in India campaign was announced. Manufacturing has increased and mobile phone makers, Boeing, Daimler and IKEA have located to India. The reassurance that retrospective taxation will not apply will have helped investments- nobody wants a sting in the tale. In the rail industry Memorandums of Understanding have been signed with several countries to allow the transfer of technical cooperation in high speed rail, modernisation of infrastructure and maintenance. GE and Alstom have been awarded contracts for electrical and deisel locomotive factories.
However there is still a long way to go. Essential bills are stuck in Parliament including the bankruptcy bill. The workforce needs to be highly skilled and diverse, infrastructure needs to be modernised (roads, power, water) and corruption needs to be tackled. It’s a tall order for a Government without much money. Make in India – maybe.