The Way Ahead for Excellence in

Manufacturing and Service Sector

Key Note Address at SIES on 14 Feb-2014

Why “Make in India”???  India had fallen to a lowly 134th rank out of 189

countries this year (three down from 2013) in the World Bank’s Ease of Doing Business rankings

Currently, it takes 12 procedures and 27 days to start business, 35 procedures and 168 days to get construction permits and 1420 days to enforce contracts in India.

Manufacturing value added as a share of GDP in 2013 is 12.89% which is lower than Pakistan (13.89%) and Bangladesh (17.55%)

India’s chronic infrastructure and logistics deficit with inefficient transport networks makes it tough for manufacturing companies to achieve just-in-time production

From furniture and gadgets to industrial equipment, India is importing almost all products from its neighbor, even yarn for saris

It is estimated that over 99 per cent of Bangalore silk saris are being made with Chinese silk yarn

And so on ……..

India vis-à-vis China

India exported goods of worth $15 billion to China and imported goods of worth $51 billion in 2013 from China

Confederation of Indian Industry estimates China enjoys cost benefit of about 10% over Indian manufacturing

Labor Market Efficiency out of 138 countries is 99 for India and 34 for China

Manufacturing contribution to GDP 12.9% for India and 31.8% for China

Share in global manufacturing exports 1.6% and 17.5% respectively

Share in global manufacturing employment 5.6% and 34% for China

Make in India – Right time to get in An index of manufacturing costs created by the Boston

Consulting Group (BCG) of the world’s 25 biggest exporters shows China’s traditional cost advantage is now under pressure

 Just-in data from the International Monetary Fund show that China is no longer the largest trade surplus economy in the world

Here is an opportunity “Make in India” must tap in

U.S. Bureau of Labor Statistics publishes: Average labor compensation in India’s manufacturing

sector increased only, from $0.68 an hour in 1999 to $1.50 an hour in 2014

The average compensation in China’s manufacturing sector rose 20 percent year-on-year in the same period to $3 an hour

A nearly 500-million-strong labor force comprising unskilled workers and English-speaking scientists, researchers, and engineers

Make in India - – Right time to get in In 2013, only 15% of GDP which need to be enhanced to

25% by 2022 for creating more job opportunities

India rich in natural resources

Labor is aplenty and skilled labor is easily available given the high rates of unemployment among the educated class of the country

With Asia developing as the outsourcing hub of the world, India is soon becoming the preferred manufacturing destination of most investors across the globe

10% growth is targeted annually fro manufacturing sector

Make in India is all about harnessing this demand and boost the Indian economy

M A K E I N I N D I A - A m a j o r i n i t i a t i v e Making India a manufacturing hub and

economic transformation in India

Eliminating the unnecessary laws and regulations

Making bureaucratic processes easier and shorter and make government more transparent, responsive and accountable

Facilitating the time-bound project clearances through a single online portal and by the eight-members team to answer queries within 48 hours

Addressing key issues including labor laws, skill development and infrastructure

Create 100 million jobs by 2022

MAKE IN IND IA -Ob jec t i ves PM Narendra Modi launched make in India

announced on 15 August 2015 and on 25 September 2014

National program designed to transform India into Global Manufacturing Hub

Converting India to self-reliant country

Make in India programme includes major new initiatives designed to

Attract investment

Foster innovation

Enhance skills development and create job opportunities

Protect Intellectual Property

Strengthen manufacturing sector

Identified 25 key sectors to focus on

25 Key Sectors – Manufacturing and Services

Make in India Framework

New processes New infrastructure Sectors New mindset IPR Protection

Creating conducive environment for manufacturing and services sectors to

enable Indian economy to be among the top ones

M A K E I N I N D I A - N e w p r o c e s s e s Licenses application licenses on line

Self-certifications

De-regulation for duals items used in defense or other industries

eBiz – a single window IT platform for services

Clearances on-line – Environmental, etc.

Returns through online unified forms

Checklists of required compliances

Electronic registers to replace hard-copy registers

Check on Inspector Raj - No inspections without approval of HOD

M A K E I N I N D I A - N e w i n f r a s t r u c t u r e Industrial corridors and smart cities

New Industrial clusters to promote advanced manufacturing

17 National Investment and Manufacturing Zones

Nurturing Innovation through Compliance with global standard

Online processes

Skill development through Augmentation of training infrastructure

Already more than 51,216 youths trained with annual capacity of 144,000 youths

4 branches for Footwear Design and Development

M A K E I N I N D I A - N e w S e c t o r s

1. Policy in Defense sector liberalized and FDI cap raised from 26% to 49%.

2. Portfolio investment in Defense sector permitted up to 24% under the automatic route.

3. 100% FDI allowed in Defense sector for modern and state of the art technology on case to case basis.

4. 100% FDI under automatic route permitted in construction, operation and maintenance in specified Rail Infrastructure projects such as:

a) Suburban corridor projects through PPP

b) High speed train projects

c) Dedicated freight lines

e) Rolling stock including train sets and locomotives/coaches manufacturing and maintenance facilities

f) Railway electrification

g) Signaling systems

h) Freight terminals

i) Passenger terminals

j) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivity to main railway line

k) Mass Rapid Transport Systems

5. Easing of norms underway for FDI in the Construction Development sector

M A K E I N I N D I A - N e w M i n d s e t

Most importantly, the Make in India program represents an attitudinal shift in how India relates to investors:

Not as a permit-issuing authority, but as a true business partner

Dedicated teams that will guide and assist first-time investors

Focused targeting of companies across sectors

Make in India – Services Sector India has the second fastest growing services sector

in the world with a compound annual growth rate at 9 per cent, just below China's 10.9 per cent, during 2001 to 2012, the Economic Survey said

Access to banking services Expanding the penetration of banking infrastructure

into rural areas to make access easier and more affordable for account holders

Potential solutions include creating low-cost service models that offer incentives to multiple industry participants (such as telecom providers, banks, and payment providers), improving digital literacy, and e .. 

Use of technology-enabled solutions such as massive open online courses (MOOCs) to enhance the reach and quality of vocational education is gaining ground 

MAKE IN INDIA - What is in news? http://zeenews.india.com/ on January 17, 2015

"Japan will contribute to Prime Minister Narendra Modi's 'Make in India' initiative to support India in becoming a base of economic growth for the Indo-Pacific region and the world," Japanese Foreign Minister Fumio Kishida said in.reuters.com on Feb 5, 2015

Chinese telecom company Huawei Technologies Co Ltd has invested $170 million (Rs 1,037 crore at 1 dollar = 61 rupees) to open a research and development centre in India as it ties itself to Prime Minister Narendra Modi's 'Make in India' campaign, the company said on Thursday.

http://profit.ndtv.com/ on 25 Sep 2014

Reliance Industries Chairman Mukesh Ambani on Thursday described The launch of Prime Minister Narendra Modi's "Make in India" campaign as a "historic" day for Indian industry and said his company will create 1.25 lakh new jobs over the next 12-15 months as part of the movement.http://www.thehindu.com/ October 26, 2014

Havells, Godrej, Micromax and auto-components maker Bosch are amongst a handful of companies that have recently moved back to India some part of their manufacturing or outsourcing in China owing to currency, labour and other cost advantages.

http://www.moneycontrol.com/on 25 Jan 2015

Make in India campaign' touches right chord at somewhere in the minds of the global community and now it is up to us to convert the sentiments into ground reality by proper follow-up and suitable actions” – Mr. Shriprakash Shukla, Group Strategy Chief at M&M  at World Economic forum (WEF)

MAKE IN INDIA - What is in news? http://www.dnaindia.com/ on 13 February 2015

IT hardware industry body MAIT has asked the government to consider giving duty relief and export sops to boost the domestic electronic manufacturing sector.

The industry body its members have already invested over $2 billion in ICT manufacturing facilities across India and are looking to attract more investments.

Urging the Prime Minister to consider the recommendations, MAIT said it will continue to actively engage and jointly work with the government towards making 'Make In India' a success.

http://timesofindia.indiatimes.com/ on 13 February 2015

A four-day industrial expo, 'NIMA Index-2015', which will be organised by Nashik Industries & Manufacturers' Association (NIMA) from April 24, will focus on new engineering technology for making Nashik a manufacturing hub in view of the 'Make in Maharashtra' drive launched by chief minister Devendra Fadanvis on the lines of 'Make in India'. 

References

http://www.makeinindia.com

http://en.wikipedia.org/wiki/Make_in_India

http://www.thehindu.com/sunday-anchor/sunday-anchor-make-in-india-vs-make-in-china/article6533575.ece