Launched in 2014, the Made in India campaign represents a significant shift from India’s prior position on self-sufficiency. Made in India attempts to support indigenous industry without impeding competition, in contrast to previous protectionist measures. But there have been questions about how the campaign is being carried out, especially with relation to the use of tariffs to defend homegrown industries.
Although they may be overblown, concerns about protectionism expanding to other industries are not unjustified. For those who lived through them, the recollections of earlier decades—which were marked by shortages, black markets, and rent-seeking—remain vivid. The success of Made in India depends on not making the same mistakes as before.
The primary policy of Made in India is still the most important one, even though it has given rise to derivatives like Made for India and Made in India. Made in India supports Indian production elements, whereas Make for India emphasizes manufacturing for the home market. But these derivatives cannot succeed if Made in India is not implemented well.
The key to success is India’s capacity to develop into a major hub for global manufacturing. The National Manufacturing Policy, which was launched in 2011, addressed the issues the manufacturing sector was facing, such as a lack of trained labor and infrastructure, and helped pave the way for Made in India. The objective is to generate 100 million jobs and raise the manufacturing sector’s GDP share from 15% to at least 25%.
The government launched the production-linked incentive (PLI) program to boost global competitiveness and draw investments in order to accomplish these goals. Official data is still hard to come by, making it difficult to evaluate PLI’s effectiveness in terms of value addition and employment generation. To develop effective industrial policies, a balanced strategy combining data-driven analysis and a moral compass is therefore required.
PLI is appropriate for luxury manufacturing, but for widespread inclusive growth and job creation, it is imperative to concentrate on labor-intensive industries. Research on the labor market in India indicates that the unorganised sector is dominated by low-wage, informal jobs, which impedes the establishment of productive jobs. Scale and competitiveness are key factors in replicating China’s manufacturing success.
India needs to take advantage of this chance to prioritize inclusive growth and the creation of large numbers of jobs as it moves forward with its next phase of industrial policy. India has the potential to become a global manufacturing powerhouse by utilising its large labor pool and tackling the issues the industry is facing. Achieving a balance between worldwide competitiveness and providing high-quality jobs for its large labor pool is critical to the success of Made in India.
