India’s manufacturing landscape has undergone a significant transformation over the past decade. The ‘Make in India’ initiative was launched in September 2014 and aimed to promote India as the most preferred global manufacturing destination. ‘Aatmanirbhar Bharat Abhiyan’ was launched in May 2020 and focuses on self-reliance.

This blog analyses the evolution of these policies and the impact they have made on the Indian economy, providing valuable insights for business students of SMS Varanasi.

Make in India: A Catalyst for Change

The “Make in India” initiative was envisioned as a landmark project that aimed to transform the Indian economy by boosting the manufacturing sector. This ambitious initiative of the Indian government was designed to encourage both domestic and international companies to manufacture their products in India, thus reshaping the manufacturing policy of India.

The key goal of Make in India was to increase the manufacturing sector’s contribution to the Indian economy from 16% to 25% of the GDP by 2025. It aimed to create millions of jobs, attract significant foreign direct investment (FDI), and foster innovation. Key features included policy reforms, enhanced infrastructure, and the establishment of industrial corridors.

According to the Ministry of Commerce & Industry, due to Make in India, FDI inflows in manufacturing surged by 57% from 2014-2022 compared to 2006-2014. Production Linked Incentive (PLI) schemes, creating substantial job opportunities, and enhancing manufacturing capabilities. There was an outlay of 1.97 lakh crore rupees and 733 applications were approved across 14 sectors.

Improvements in ease of doing business included the National Single Window System and Project Development Cells to fast-track investments. The One District One Product (ODOP) initiative promoted regional development by fostering unique local products – over 1000 products from 761 districts. These efforts collectively make India a global hub for manufacturing, design, and innovation.

This initiative led to many success stories. Companies like Samsung, Xiaomi, and Foxconn have set up major manufacturing units in India, contributing to job creation and technological advancements. However, the initiative also faced challenges such as bureaucratic red tape, infrastructural bottlenecks, and the need for more robust supply chains.

Atmanirbhar Bharat: A Vision for Self-Reliance

The Atmanirbhar Bharat initiative (Self-Reliant India), launched in 2020, aimed to transform the Indian economy by promoting self-reliance and reducing dependency on imports. With significant impacts anticipated in 2024 and beyond, this initiative aligns with the broader “Make in India” strategy to enhance domestic capabilities.

Atmanirbhar Bharat sought to make India self-sufficient by boosting local production, encouraging import substitution, and promoting exports. Government initiatives, such as the Production Linked Incentive (PLI) schemes, played a crucial role in achieving self-reliance. These policies were designed to support sectors like electronics, pharmaceuticals, and agriculture – which are pivotal to the manufacturing policy of India.

This initiative:

• Boosted Domestic Manufacturing: Strengthening the manufacturing sector and creating jobs.
• Increased Investments: Attracting both domestic and foreign investments in key sectors.
• Led to Infrastructure Development: Enhancing infrastructure to support economic growth.
• Promoted Innovation and Technology: Promoting R&D for technological advancements.
• Provided Resilience to Global Shocks: Reducing dependence on global supply chains.

But it had its share of challenges too. It hinders international trade and access to cheaper goods. Higher production costs in the short term and possible trade restrictions from other countries were other deterrents.

In some sectors, we did not have domestic expertise. Besides, bureaucratic hurdles hindered effective execution. Business students must understand both the potential and the challenges of this ambitious initiative.

Manufacturing Policy of India: A Comparative Analysis

India’s manufacturing policy has undergone significant changes. Post-independence, the focus was on self-reliance through industrialisation and import substitution. The 1990s liberalisation opened the economy to global markets, boosting foreign investments. Recently, the emphasis has shifted towards enhancing domestic manufacturing capabilities to position India as a global manufacturing hub.

Here’s a quick comparison table between Make in India vs Atmanirbhar Bharat initiatives taken by the Indian government.

Comparison: Make in India vs. Atmanirbhar Bharat

Aspect	Make in India	Atmanirbhar Bharat
Launch Year	2014	2020
Focus	Attract global investments	Enhance self-sufficiency
Approach	Improve ease of doing business	Promote local production and innovation
Target Sectors	25 sectors including defence, aviation	Key sectors like electronics, pharma
Key Measures	FDI reforms, infrastructure development	PLI schemes, import substitution

The ‘Make in India’ initiative centres on attracting international investments and integrating India into global supply chains. It means to streamline regulations and enhance infrastructure to attract foreign companies. This initiative led to many reforms to improve the business environment and attracted FDI.

‘Atmanirbhar Bharat’ prioritises reducing import dependency and bolstering local manufacturing. Hence, it provides incentives for domestic production and fosters innovation within the country. 

Make in India has improved FDI inflows and India’s ease of doing business ranking. However, it faced challenges due to global economic conditions and domestic policy constraints. On the other hand, Atmanirbhar Bharat aims to build on this foundation by promoting self-reliance. Early signs indicate potential success in strengthening local manufacturing and reducing import dependency, though its full impact remains to be seen. 

Both these initiatives aim to strengthen the Indian economy through different strategies. We advise our business students to analyse the manufacturing policy of India well and be better prepared for the future.

Conclusion

India’s manufacturing policies, through the “Make in India” and “Atmanirbhar Bharat” initiatives, have driven significant change. “Make in India” attracted global investments, while “Atmanirbhar Bharat” focused on self-reliance and local production. Both initiatives have their unique challenges and successes. 

Future policies should balance global integration and self-sufficiency to further bolster the Indian economy. Business students should explore the diverse opportunities in India’s evolving manufacturing sector and stay informed about policy developments.