Abstract

This case discusses the ‘Make in India’ initiative announced by the Prime Minister of India, Narendra Modi (Modi), in September 2014. The initiative aimed to make India a global manufacturing hub encouraging domestic companies as well as Multinational Corporations (MNCs) to manufacture their products in India. While this initiative aimed to give India global recognition, it also sought to create employment opportunities for India’s youth. With the Make in India initiative, the government of India (GoI) aimed to transform India — a nation comprising farmers, IT professionals, and call center employees — into a manufacturing hub. The GoI pledged to train around 500 million people in manufacturing by 2022. In the past, several challenges had inhibited the GoI from growing India’s manufacturing sector. Some of these were lack of trained labor, stringent labor laws, and lack of infrastructure. Unlike China, which had flexible labor laws, India’s labor laws were restrictive, hurting investments in the manufacturing sector. Industry analysts stated that the major challenge for India would be to compete with the likes of existing manufacturing hubs such as China, the Philippines, Indonesia, Vietnam, and Bangladesh. Several contract manufacturers were moving their manufacturing base toward Southeast Asian countries since the wages in these countries were lower than those in China. Experts pointed out that the prime advantage these countries had was the basic infrastructure, which was crucial for the manufacturing sector to prosper. Also, the land and labor laws were more favourable in these countries than in India. Hence, India would have to catch up fast as the competition was likely to increase from other emerging countries such as Vietnam, the Philippines, those in Latin America, and South Africa. Some industry watchers also pointed out that India did not value the start-up culture much unlike countries such as the US, Australia, Canada, South Korea, and the UK. The start-ups and entrepreneurs in these countries were able to get easy access to funds. Moreover, the culture of risk-taking and innovation also supported the start-ups. However, some observers felt that the growth in technology had boosted the start-up era in India. For instance, start-ups such as e-commerce portal, Flipkart and Paytm, the e-commerce shopping website, had achieved success in the country. Experts pointed out that it remained to be seen how India would tackle these challenges to transform into a manufacturing hub. While India was trying to push the country as a global manufacturing hub, countries like China were making significant investments to progress the country’s innovation base.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze whether the ‘Make in India’ initiative would transform India into a global manufacturing hub.
• Understand the issues and challenges faced by the government of India in transforming India into a global manufacturing powerhouse.
• Analyze how India should choose its policy options – to make the country a manufacturing hub or an innovation hub

Keywords

‘Make in India’,Narendra Modi,Global manufacturing hub,Knowledge-driven economy,Innovation ,Start-up culture ,Infrastructure ,Flexible labor laws ,Manufacturing vs Innovation,Policy Initiatives,Risk Taking Culture