Is there any continuity from Make in India to Aatmanirbharta (self reliance) as far as India’s manufacturing sector is concerned?
It has been a continuous journey. The objective has been the same — how to expand India’s manufacturing sector and bring in globally competitive technology. Aatmanirbharta must not be understood as synonymous with closed door policy.
Why have we not seen large-scale private investments so far?
We have just emerged from a severe phase of the pandemic. Despite Covid, we have started seeing positive responses from certain sectors, for example, mobile phone makers. Apple has now Self-reliance also means we will produce for the world. In the Production Linked Incentive (PLI) scheme announced by the government, there has been a focus on exportability of sectors as well as their global scale and competitiveness. In a sense, Aatmanirbharta is building upon Make in India concept. It’s a step forward.shifted a significant part of its production to India. Their supply chain is also getting shifted. Samsung has been investing more. We are expecting similar responses from the API (active pharmaceutical interface) sector, among others.
Our idea has been to prepare the economy for post-Covid large investments. Our current schemes, including the PLI, will help attract multinationals who want to get out of certain geographies.
Why are a number of companies moving out of China, then, setting up factories in Vietnam or Indonesia rather than in India?
India is a very large domestic market and can certainly offer far better value to those who are moving out of China. Vietnam or Cambodia can’t match us. Let’s not look at what had happened in the past. PLI is geared towards attracting such investments to India.
Isn’t India relatively a costly and regulation-heavy destination for such investments?
In recent times, there has been a huge focus on reducing regulatory and compliance burden in India. NITI Aayog has been leading from the front on this. As far as logistics is concerned, it was an area neglected for decades. Now, the department of logistics has been working hard to reduce cost. Also, four labour codes announced by the government have given flexibility to employers and investors.
Aren’t farm protests and the incident on Republic Day (when part of Delhi was brought to a standstill by protesters) a matter for concern for investors?
Domestic and global investors recognise that protests, and for that matter disruptions, are part and parcel of our democracy. They also recognise farm protests are not going to be long-lasting. Nor will those be widespread. No democracy can give a guarantee to investors there will be zero protest. Investors today are looking at the broader picture — the positive policy steps that this government has taken.
It appears India has of late taken a conscious decision to reduce import. But won’t that increase input costs for our exporters?
The government is aware that there are import-intensive sectors. Some exports do depend heavily on import and the government is conscious of that. Import tariffs have been largely increased in areas where there has been a real injury to our domestic market as some countries dump their substandard products in India. Reduction in our import bill is being tackled in a very rational way.
What next for manufacturing in India?
The budget has given both direction and resources to the manufacturing sector. Massive increase in the capital expenditure outlays in the budget will help crowd in private investments. Yes, manufacturing is stuck at about 15-16% of the GDP (gross domestic product). The government’s policies are meant for raising that share.
Do you have any target for manufacturing as a percentage of GDP?
I don’t want to talk about any target at this juncture.