Budget may further boost Make-in-India

India not only wants to become a 'world factory' very similar to what China has been all these decades, but wants to reduce its massive import of electronic items too. To bolster manufacturing, the government brought in incentive schemes like PLI.

New Delhi, Jan 9: Since India aims to become a new-age factory of the world, the upcoming Union Budget is likely to have provisions to boost 'Make in India' mission further. Traditionally, India's focus has been on the service sector, especially IT and IteS. However, after the Modi government's focus on making India a manufacturing hub, the budgets have started paying attention to manufacturing policies.

However, with more than 1.30 billion people, millions of graduates passing every year from colleges and universities, India cannot rely on just the service sector. Prime Minister Narendra Modi knows it well and that is why he gave the clarion call when he launched 'Make in India'. With this budget, the Modi government wants to pull manufacturing out of the knot it had been in for long.

Not just that India wants to become a 'world factory' very similar to what China has been all these decades but wants to reduce its massive import of electronic items. To bolster manufacturing the government brought in incentive schemes like PLI. Now, 74% of the government incentives are directed towards new age manufacturing sectors.

Massive success for Make-in-India

As the Make in India mission completed 8 years, India has received massive FDI. Needless to say, annual FDI has doubled to USD 83 billion. Foreign investors have started liking India's changed policies that include reduction in compliance burden and greater ease of doing business. With 14 PLI schemes operational, localized manufacturing is on the top gear. For instance, India which has traditionally been a net importer of toys, has become an exporter.

India's toy exports received a growth of 636% in April-August 2022 over the same period in 2013. To promote the toy industry in India, Modi govt not just increased Basic Custom Duty from 20% to 60%, but also implemented Quality Control Order, mandatory sample testing of imported toys and preference to domestic toy manufacturers.

Thus, the turnaround has been through several reforms and measures that include amendments to laws, liberalization of guidelines and regulations, bringing down cost, etc.

Making India self-reliant in defence manufacturing

When Defence Minister Rajnath Singh emphasises that the government is working and committed to increase the defence production target from current USD 12 billion to USD 22 billion by 2025, he actually knows what he is committing to. Over the last 8 years, Modi government has tried to develop domestic defence production ecosystem.

Two mega events held biennially, i.e. DefExpo and Air India Show, have brought in tremendous change in the way India's defence sector works. Earlier, these two events were just a show but now they have become a B2B platform to help India emerge as a defence manufacturer.