A Decade of "Make in India": A Critique of Promises Unfulfilled
The "Make in India" campaign was unveiled a decade ago, heralded as a transformative initiative aimed at establishing India as a leading global manufacturing hub. The government of the day presented it as the ultimate solution to a myriad of economic challenges, promising self-sufficiency, increased job creation, and significant growth in the manufacturing sector. Fast forward to today, and the stark reality begs a critical examination: was "Make in India" merely an elaborate facade masking a series of deep-rooted economic failures?
At the heart of the "Make in India" campaign lay the goal of self-sufficiency—an aspiration to halt dependency on imports and substantially reduce the trade deficit. Analyzing the stats reveals a sobering truth: while imports as a percentage of GDP dropped slightly from 25.95% in 2013 to 23.9% in 2023, the progress is minimal. India still relies heavily on importing a wide range of products, from crude oil to advanced electronics. A decade into this campaign, the goal of manufacturing self-sufficiency seems to be further than ever, with India remaining a net importer caught in the quagmire of its own industrial inefficiencies.
The campaign set ambitious manufacturing growth targets of 12-14% annually. In stark contrast, the actual manufacturing growth over the past ten years stands at a dismal 5.5%. This lackluster performance has left India's manufacturing contribution to GDP hovering stubbornly between 15% and 17%, far from the 25% target set. While global competitors like China and Vietnam continue to evolve, India's manufacturing landscape reflects stagnation rather than growth.
Despite some growth figures in exports, they paint an incomplete picture. While exports have indeed increased, this has done little to ameliorate the trade deficit, which is projected to soar from $32.4 billion in 2014 to $54.5 billion by 2024. The notion that India would blossom into a global export powerhouse stands revealed as overstated, highlighting the lack of robust manufacturing capabilities needed to thrive on the international stage.
Foreign Direct Investment (FDI) was heralded as a cornerstone of the "Make in India" initiative, with expectations of significant foreign capital influx. While FDI inflows rose from $46 billion in 2014 to $71 billion in 2023, a more concerning trend emerges: disinvestment outflows have surged even faster—from $13.6 billion to $44.4 billion. This translates to a net capital loss, questioning India’s competitiveness and underscores its struggle to integrate effectively into the global economy. With a mere 1.5% share of global FDI, India's aspirations appear distant from the lofty rhetoric initially presented.
Perhaps the most daunting promise was the anticipated creation of 100 million new manufacturing jobs. Yet, reality presents a stark contrast: only about 18.54 million jobs have been generated in the sector. This lack of job creation compounds India's existing employment crisis, pushing graduates toward underemployment and a frustrating jobless landscape. The scarcity of secure, well-paying manufacturing jobs reflects a workforce plagued by a skills mismatch—one of the core reasons for the sector’s current malaise.
While it's tempting to blame the failures of "Make in India" solely on the current government’s administration, the reality is more complex. The campaign's poor outcomes are indicative of systemic issues that have plagued India for decades. The labyrinthine bureaucratic processes make establishing a business in India a daunting task, with inefficiencies contributing further to the manufacturing slowdown.
Furthermore, stringent environmental regulations that are meant to protect natural resources often evolve into bottlenecks, delaying critical infrastructure projects—exemplified by the drawn-out timeline of the Delhi Metro project. Similarly, acquiring land for industrial projects can take years, effectively crippling initiatives before they can take off.
Another significant impediment is India's outdated infrastructure. The current logistics and transportation network suffers from inefficiency, with goods trains running at an average speed of just 25 km/h compared to 45 km/h in China. This stark contrast prolongs transit times, heightening costs and stressing the country’s manufacturing capabilities.
A Workforce in Need of Upskilling
While India boasts a vast labor pool, the majority of these workers lack the requisite skills for modern manufacturing jobs. Only about 2% of the workforce holds formal professional certifications, and merely 5% have undergone any formal training. In contrast, countries like China, South Korea, and Japan have invested substantially in upskilling their workforce, leaving India lagging significantly behind.
A decade after its inception, the "Make in India" initiative is marred by unfulfilled promises and unattainable aspirations. The evidence suggests that rather than propelling the nation into a manufacturing paradise, it has exposed the deep-seated structural and systemic inefficiencies that hinder India’s economic progress. Whether India can redefine its trajectory and address these myriad issues remains to be seen, but as it stands, the vision of "Make in India" stares down a long path fraught with challenges.
Part 1/9:
A Decade of "Make in India": A Critique of Promises Unfulfilled
The "Make in India" campaign was unveiled a decade ago, heralded as a transformative initiative aimed at establishing India as a leading global manufacturing hub. The government of the day presented it as the ultimate solution to a myriad of economic challenges, promising self-sufficiency, increased job creation, and significant growth in the manufacturing sector. Fast forward to today, and the stark reality begs a critical examination: was "Make in India" merely an elaborate facade masking a series of deep-rooted economic failures?
The Self-Sufficiency Mirage
Part 2/9:
At the heart of the "Make in India" campaign lay the goal of self-sufficiency—an aspiration to halt dependency on imports and substantially reduce the trade deficit. Analyzing the stats reveals a sobering truth: while imports as a percentage of GDP dropped slightly from 25.95% in 2013 to 23.9% in 2023, the progress is minimal. India still relies heavily on importing a wide range of products, from crude oil to advanced electronics. A decade into this campaign, the goal of manufacturing self-sufficiency seems to be further than ever, with India remaining a net importer caught in the quagmire of its own industrial inefficiencies.
Manufacturing Growth: A Case of Stagnation
Part 3/9:
The campaign set ambitious manufacturing growth targets of 12-14% annually. In stark contrast, the actual manufacturing growth over the past ten years stands at a dismal 5.5%. This lackluster performance has left India's manufacturing contribution to GDP hovering stubbornly between 15% and 17%, far from the 25% target set. While global competitors like China and Vietnam continue to evolve, India's manufacturing landscape reflects stagnation rather than growth.
Exports: A Temporary Band-Aid
Part 4/9:
Despite some growth figures in exports, they paint an incomplete picture. While exports have indeed increased, this has done little to ameliorate the trade deficit, which is projected to soar from $32.4 billion in 2014 to $54.5 billion by 2024. The notion that India would blossom into a global export powerhouse stands revealed as overstated, highlighting the lack of robust manufacturing capabilities needed to thrive on the international stage.
Foreign Direct Investment: The Grim Reality
Part 5/9:
Foreign Direct Investment (FDI) was heralded as a cornerstone of the "Make in India" initiative, with expectations of significant foreign capital influx. While FDI inflows rose from $46 billion in 2014 to $71 billion in 2023, a more concerning trend emerges: disinvestment outflows have surged even faster—from $13.6 billion to $44.4 billion. This translates to a net capital loss, questioning India’s competitiveness and underscores its struggle to integrate effectively into the global economy. With a mere 1.5% share of global FDI, India's aspirations appear distant from the lofty rhetoric initially presented.
The Job Creation Fallacy
Part 6/9:
Perhaps the most daunting promise was the anticipated creation of 100 million new manufacturing jobs. Yet, reality presents a stark contrast: only about 18.54 million jobs have been generated in the sector. This lack of job creation compounds India's existing employment crisis, pushing graduates toward underemployment and a frustrating jobless landscape. The scarcity of secure, well-paying manufacturing jobs reflects a workforce plagued by a skills mismatch—one of the core reasons for the sector’s current malaise.
Systemic Failures and Bureaucratic Nightmares
Part 7/9:
While it's tempting to blame the failures of "Make in India" solely on the current government’s administration, the reality is more complex. The campaign's poor outcomes are indicative of systemic issues that have plagued India for decades. The labyrinthine bureaucratic processes make establishing a business in India a daunting task, with inefficiencies contributing further to the manufacturing slowdown.
Furthermore, stringent environmental regulations that are meant to protect natural resources often evolve into bottlenecks, delaying critical infrastructure projects—exemplified by the drawn-out timeline of the Delhi Metro project. Similarly, acquiring land for industrial projects can take years, effectively crippling initiatives before they can take off.
Infrastructure Challenges
Part 8/9:
Another significant impediment is India's outdated infrastructure. The current logistics and transportation network suffers from inefficiency, with goods trains running at an average speed of just 25 km/h compared to 45 km/h in China. This stark contrast prolongs transit times, heightening costs and stressing the country’s manufacturing capabilities.
A Workforce in Need of Upskilling
While India boasts a vast labor pool, the majority of these workers lack the requisite skills for modern manufacturing jobs. Only about 2% of the workforce holds formal professional certifications, and merely 5% have undergone any formal training. In contrast, countries like China, South Korea, and Japan have invested substantially in upskilling their workforce, leaving India lagging significantly behind.
Part 9/9:
Conclusion: A Future Uncertain
A decade after its inception, the "Make in India" initiative is marred by unfulfilled promises and unattainable aspirations. The evidence suggests that rather than propelling the nation into a manufacturing paradise, it has exposed the deep-seated structural and systemic inefficiencies that hinder India’s economic progress. Whether India can redefine its trajectory and address these myriad issues remains to be seen, but as it stands, the vision of "Make in India" stares down a long path fraught with challenges.