Make in India

Indian Economy glossary

Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT

Meaning

Make in India is the Union government's flagship manufacturing campaign, launched in September 2014. Its aim is to make India a global manufacturing hub. It does this by making it easier to do business, attracting domestic and foreign investment, and creating factory jobs.

It matters because India's manufacturing share has stayed low. It is still about 15-17% of GVA (gross value added, the value an economy adds after subtracting the cost of inputs; verify current). Policy has also struggled to create enough jobs for a labour-abundant country.

Explanation

Where it came from

  • National Manufacturing Policy 2011 set the goals that Make in India took forward:
  • manufacturing at 25% of GDP;
  • 100 million jobs;

  • NIMZs (National Investment and Manufacturing Zones, large planned industrial townships).

  • Make in India began in September 2014. Later campaigns built on it:

  • Make in India (2014) → Atmanirbhar Bharat (2020) → National Manufacturing Mission (Budget 2025-26).

  • It is a campaign, not a law or a single scheme. It brings many tools together under one brand.

The main tools

  • Ease of doing business (EoDB), meaning how simple it is to start, run and close a firm:
  • India's World Bank Doing Business rank rose from 142 (DB2015) to 63 (DB2020).
  • That index was dropped in September 2021 over data irregularities. B-READY (2024) replaced it.
  • DPIIT's BRAP (Business Reform Action Plan) ranks states on reforms.
  • The National Single Window System (2021) lets an investor get all approvals through one interface.

  • The Jan Vishwas Act 2023 decriminalised 183 provisions in 42 Acts. Small mistakes now attract fines, not jail.

  • Production-linked incentive (PLI):

  • It pays firms a percentage of incremental sales, meaning extra sales over a FY20 base year.
  • It launched in 2020-21 across 14 sectors with about Rs 1.97 lakh cr.

  • There is no reward for simply existing. A firm is paid only when it produces and sells more.

  • Phased manufacturing programme (PMP):

  • It uses graded tariffs, meaning import duties raised step by step, to push firms to make more parts at home.

  • It was abolished in 1991 and revived in 2017 for mobile handsets. Duties were phased in on chargers, batteries, displays and PCBAs.

  • Semiconductors:

  • the India Semiconductor Mission (2021, Rs 76,000 cr);

  • the design-linked incentive (DLI), which rewards spending on designing chips in India, not just building fabs.

  • Zones and infrastructure:

  • SEZs (SEZ Act 2005), industrial corridors and PM MITRA textile parks;
  • PM GatiShakti and the National Logistics Policy 2022, which aim to cut transport costs.

What has worked and what has not

  • Worked: mobiles and electronics
  • PLI succeeded through contract manufacturing, where a brand outsources production to another maker who builds to its design.

  • Examples: Foxconn and Tata Electronics for Apple.

  • Mixed: other sectors (verify current).

  • Manufacturing share barely moved: it is still about 15-17% of GVA, far below the 2011 target of 25% of GDP.
  • Why jobs lag
  • Since the Mahalanobis era, growth has been capital-intensive, meaning it relies on machines and uses few workers per unit of output.
  • Rigid labour laws kept firms small.
  • The missing middle means many tiny firms, a few big ones, and few mid-sized firms.
  • Result: India specialised in capital- and skill-intensive goods, even though it has plenty of labour.

In India

  • Nodal department: DPIIT (Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry) runs the campaign. It also handles FDI policy and BRAP.
  • Legal and policy base: Make in India is an executive initiative, not a law. It works through:
  • PLI notifications (2020-21);
  • the SEZ Act 2005;
  • the Jan Vishwas Act 2023;

  • FDI rules, for example 100% automatic FDI in marketplace e-commerce (Press Note 3/2016).

  • Measuring progress:

  • manufacturing share of GVA (about 15-17%, verify current);
  • the Index of Eight Core Industries (weight in IIP 40.27%, from the Office of the Economic Adviser, DPIIT);

  • the IIP (from NSO-MoSPI).

  • Shift towards jobs:

  • Economic Survey 2019-20 proposed "Assemble in India", meaning joining global supply chains for network products such as electronics.

  • Budget 2025-26 targets labour-intensive sectors such as footwear and leather and toys. It also has an Employment Linked Incentive (verify current).

  • Deregulation agenda: Economic Survey 2024-25 calls for cutting "regulatory cholesterol", the build-up of outdated rules that raise costs and scare off investment.

Don't confuse with

  • Production-linked incentive (PLI): PLI is one scheme (cash on incremental sales over FY20) that serves Make in India. Make in India is the wider campaign. PLI began in 2020-21, not 2014.
  • Atmanirbhar Bharat (2020): this is the self-reliance push launched later, which also covers reducing import dependence. Make in India (2014) is mainly about investment and manufacturing.
  • "Assemble in India" (Economic Survey 2019-20): this is a strategy proposal to specialise in assembling network products for global supply chains. It is not a separate government scheme.
  • Import substitution (first seven plans): that protected home industry behind tariffs and quotas and ignored exports. Make in India aims at global competitiveness and exports, alongside FDI.

Prelims Hooks

  • Make in India: launched September 2014. Sequence: Make in India (2014) → Atmanirbhar Bharat (2020) → National Manufacturing Mission (Budget 2025-26).
  • National Manufacturing Policy 2011 (not Make in India) set the target of manufacturing at 25% of GDP and 100 million jobs, through NIMZs.
  • PLI = incentive on incremental sales over a FY20 base year. It covers 14 sectors with about Rs 1.97 lakh cr (2020-21).
  • Trap: "PLI pays a subsidy on total output" is FALSE. It pays only on additional sales over the base year.
  • PMP was revived in 2017 for mobile handsets. India Semiconductor Mission: 2021, Rs 76,000 cr.
  • Doing Business rank: 142 (DB2015) → 63 (DB2020). The index was dropped in September 2021, and B-READY (2024) replaced it.

Mains Points

  • Output vs jobs: PLI raised mobile output through contract manufacturing, but manufacturing is still about 15-17% of GVA, and the legacy of capital-intensive growth limits jobs. A strong answer argues for labour-intensive sectors (footwear, leather, toys, textiles), "Assemble in India", and fixing the missing middle by removing size-linked rules that punish growth.
  • Incentives vs reforms: subsidies like PLI and ISM cost the government money and can attract assembly with little domestic value addition. Lasting competitiveness needs cheaper logistics (GatiShakti, NLP 2022), deregulation (Jan Vishwas, "regulatory cholesterol"), and a stable, rules-based "pro-market, not pro-business" policy.
  • Industrial policy is back, with a new design: unlike the licence raj, Make in India uses market-linked, performance-based support (PLI, DLI, PMP). Answers can test whether these tools avoid old failures such as rent-seeking and captive markets while building capability, including in sunrise industries like semiconductors.

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