Make in India

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August 26,2016
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The Make in India – an ambitious campaign launched by Prime Minister Modi in September 2014, aiming to transform India into a global design and manufacturing hub by encouraging both multinational as well as domestic companies to manufacture their products within India. The campaign also aimed at attracting a continuous flow of FDI in India. The initiative has made a strong impact on the investment climate of the country and growth of Foreign Direct Investment so far. The Key focus sectors of India including defence, railways, construction, insurance, medical devices etc. have all been rapidly opened up for Foreign Direct Investment in order to boost these sectors. The Indian Government has "radically liberalized" the FDI regime and opened up multiple sectors for 100 per cent FDI under automatic route. Since its launch, the Government of India has taken several initiatives to create an investor friendly environment and to encourage manufacturing, innovation and entrepreneurship in India. With a growth rate of 7.5%, India has emerged as the fastest growing economy globally leaving china behind. The Government of India has also taken up a number of measures to radically improve its ‘Ease of Doing Business’ ranking. The Indian Government has promised to slash red tape and re-vamp regulatory frameworks, create a paperless environment and facilitate skill development in order to accelerate investment inflows. Government Duties have been brought down on various commodities and many other initiatives taken up to boost the Indian economy. Make in India Mission: •To transform India into a global design and manufacturing hub. •Encouraging Design & Development, Innovation & Technology, Youth & Skill development and Startups in India Make in India Vision: •Increasing manufacturing sector growth to 12-14% p.a. over the medium term. •Increase in the share of manufacturing in the country’s GDP from 16% to 25% by 2022. Impact of Make in India Campaign: •India is now 1st amongst the world’s fastest growing economies as per International Monetary Fund. •India is 1st amongst the world’s topmost greenfield FDI destinations, January-June 2015 (Source: Financial Times, FDI Markets) •India is 1st amongst the world’s fastest growing economies in both 2016-2017 as published in WESP Report 2016, United Nations. •India is the 1st choice for technological MNCs to set up R&D centers outside their home countries. •India is 1st amongst the world’s most attractive investment destinations as per Ernst & Young – 2015 India Attractiveness Survey •India is now 1st amongst 110 investment destinations polled globally. (Foreign Policy Magazine, Baseline Profitability Index, 2015) •India’s rank jumped 12 places on the ‘Ease of Doing Business’ 2016 list. (Source: World Bank) •India moved 16 places on the Global Competitiveness Index 2015-16. (Source: World Economic Forum) Benefits from Make in India Initiative: An Investor’s Prospective: •The Government of India services have been integrated with the online single window eBiz portal to facilitate Single window clearance. •Various incentives under income tax act, several additional deductions are provided for instance deduction equal to 30% of additional wages paid to new regular workmen employed by the assesse over and above 50 workmen, higher weighted deductions of 200% provided for expenditure related to R&D etc. •Liberalization of licensing policies for instance Defence sector wherein large numbers of parts/components, casting, forgings etc. have been excluded from the purview of industrial licensing. •Process of applying for Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM) has been made online for hassle free environment. •Initial validity period of Industrial License has been increased to three years from two years. •Each state government has its own incentive policy, which offers various types of incentives based on the amount of investments, project location, employment generation, etc. •The broad categories of state incentives include stamp duty exemption for land acquisition, refund or exemption of value added tax, exemption from payment of electricity duty etc. Make in India Week Key Deals During The Week: •Sterlite Group company TwinStar Display Technologies & MIDC for LCD manufacturing unit in technical collaboration with Autron of Taiwan. •BAE Systems and Mahindra for assembling and testing of M777 Howitzers •Trivitron healthcare manufacturing unit in Chennai •Gujarat Government and Vestas (Denmark) for wind mill blades manufacturing unit at Ahmedabad •Amongst fortune 500, Oracle’s US$ 400 million investments in India to set up 9 incubation center in India, Boeing to assemble fighter planes in India, Qualcomm to start "Design in India" programme. •Foxconn, the manufacturer of Apple’s iPhones plans for creating 10-12 facilities in India, which will include factories and data centers. •Various other deals in multiple sectors including Railways, Aviation, Automobiles etc. Japan’s Contribution to Make in India: •Japan to make billions of dollars of investments in India, including a $12-billion loan at negligible interest for the much touted "Bullet Train" and another $12 billion for "Make in India" initiative. • Special Industrial Townships by Japan in India in various parts of the country and India in turn to design a special package of incentives for the same. •"Japan-India Make-in-India Special Finance Facility" which would provide loans to Japanese companies to support direct investment in India. •Indo-Japan economic partnership to import cars manufactured in India to Japan. Germany’s Contribution to Make in India: •German Small and Medium Enterprises (SMEs) have pledged to invest over near about $462 million for the 'Make in India' initiative for setting up of new manufacturing plants and projects. •The investments will result in setting up of 15 new manufacturing plants, 6 expansion projects and 2 pilot projects covering the states of Maharastra, Gujarat, Karnataka and Tamil Nadu. •India and Germany also agreed to enhance ties in key areas of defence manufacturing, trade, intelligence and clean energy. •German investment worth around $2.25 billion in developing India’s clean energy corridors and solar energy industry Australia’s Contribution to Make in India: •Australia’s civil nuclear agreement, new Framework for Security Cooperation, Social Security Agreement to reduce business costs and enhance two-way mobility. •More than $15 billion in Indian coal investments in Queensland. Australia can also help India diversify its energy base through the supply of low-emission LNG and uranium. The multi-sectoral Make in India Week has been a huge success and created a favorable environment for investors from across the world. However, many projects are in the early stages and it would take time to implement yet it is clearly evident that Make in India has already created a strong impact with tangible results within a span of two years and there are many more developments yet to come in upcoming years.

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