BackHow far is Made In India from Make In India?
As the Make in India Week concluded on Thursday, corporate chiefs had no clear answers
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Mumbai: What is the distance between Make in India and “made in India"? As the Make in India Week concluded on Thursday, corporate chiefs had no clear answers.
Make in India was launched by Prime Minister Narendra Modi in September 2014 to encourage international companies to manufacture products in India.
Many business leaders, whom Mint spoke with, pointed to speeches by ministers during the Make in India Week, which was meant to showcase India’s manufacturing capabilities.
Sample this.
On 13 February, while inaugurating the event, Modi said, “We are also swiftly working towards making our tax regime transparent, stable and predictable." He said the government had carried out a number of corrections on the taxation front and would not resort to retrospective taxation.
The very next day Union finance minister Arun Jaitley said he was conscious of the fact that India’s tax regime had to be stable and predictable and the government would aim to make corporate tax rates globally competitive.
The same day, commerce minister Nirmala Sitharaman said taxes need to be predictable.
But what happened in next two days was in glaring contrast with the position taken by Modi, Jaitley and Sitharaman.
The Indian government said it may seize telecom firm’s Vodafone Group Plc.’s assets in the country if the company doesn’t pay ₹ 14,200 crore in tax, though the matter is under international arbitration.
“Make in India Week venue looks great. Intent is also great. Contradicting the spirit, tax terrorism is also back on the table. Investors are still unsure about the tax regime in India," said a consultant to Indian and foreign companies investing in India, requesting anonymity.
Another consultant, visiting seminar halls and exhibition stalls, stopped to ask: “Where are the foreign investors? Make in India Week is also to promote India as a manufacturing destination. But I could not see foreign investors getting excited about India as an investment destination." He too requested anonymity.
“The distance between Make in India and ‘made in India’ is at least two years. I expect tax-friendly measures to boost manufacturing only in the last budget of the current government," he said.
Attending a session, Kumar Mangalam Birla, chairman, Aditya Birla Group, said the investment climate is much better now than it was six months ago.
Recounting India’s track record in the manufacturing sector, Birla said India has large, cutting-edge manufacturing facilities in petrochemicals, cement and fibre.
“Indians have to infuse a sense of self-pride and positivity into conversations. With the kind of commitment on Make in India, in less than a decade, ‘made in India’ will be an international brand that we will be proud of and India will be a global brand to reckon with," he said.
Birla said India is yet to see any brand coming out of the country that is truly global.
While Make in India is a brilliant initiative and the central government may be trying everything it can to make it a success, the “on-the-ground delivery" is dependent on how quickly Indian can improve the reality and perception on “law and order", said Pankaj Sharma, head of equities, Equirus Securities Pvt. Ltd.
He was referring to incidents such as the murder of two engineers in Bihar’s Darbhanga district for non-payment for ransom and protesters from the Kapu community setting fire to a train near Visakhapatnam in Andhra Pradesh.
“In a report dated 14 December 2015 (National GDP data hides more than what it reveals, state-wise analysis is a lot more interesting), we have written that a) the role of local political leadership is extremely critical to make growth more consistent and broad-based, b) stable leadership is a necessary but not sufficient condition for the development of a state, and c) for a state to grow, success in all sectors is important," Sharma said.
Sharma said he strongly believes that the growth and well-being of a state is critically dependent on the political leadership and “rule of law" in the state.
“That analysis in the report mentioned above was largely political in the context of different GDP growth rates across states, but this is something very much applicable in this case too. Unless all the parts (read, the states) of the country pull in the same direction, initiatives like Make in India would be much less successful than they could have been," Sharma said.
However, Modi said changes are taking place at the state-level too and there is healthy competition among states in terms of ease of doing business and boosting infrastructure linkages.
A few international companies including Boeing Co. and Saab AB have expressed their intent to manufacture fighter jets in India.
Hakan Buskhe, president and chief executive officer, Saab, was impressed with the Make In India week.
“It has become a strong brand globally. I am impressed with the branding initiatives of the government," Buskhe said.
Amitabh Kant, secretary, department of industrial policy and promotion (DIPP), said Make in India has brought in ease of doing business, opened up the foreign direct investment (FDI) regime wider and put manufacturing centre stage.
“I think the key point is that a lot has been done in the last 18-19 months. The Indian economy has been opened up. Vast sectors of our FDI regime have been opened up. We have made India an easier place to do business in," Kant said.
When asked how much distance the country still had to cover between Make in India and ‘made in India’, Kant said: “Make in India is a beginning and we are almost near ‘made in India’."
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