The Union government, under the leadership of the Prime Minister, has been focusing on making this journey an exciting one for global investors. It does take plenty of promotion to get prospective investors to sign on this journey, given the uncertain global economic outlook and the disappointment of those who embarked on this journey during the bubble years in the beginning of the millennium.
These relentless efforts during the past few months to promote India as a manufacturing destination, has indeed managed to rekindle interest in India across the globe. This is no mean achievement.
Given the excess capacity in most sectors, it is not surprising that people have not been rushing to buy tickets to boards the Make in India bus. They are not buying tickets for any journey � India, China, the US, or anywhere else. Consequently, growth in the share of manufacturing in Indias GDP from the current level of about 13 per cent to the targeted 25 per cent will more likely trace the trajectory of a light aircraft than a helicopter.
INVESTMNET-IN-INDIA
Eventually, when excess capacity gets taken up and investment proposals enter the board agendas of global companies, India will no doubt be a serious contender.
While it is necessary to continue with high decibel promotion to get reluctant travellers to board the bus, we need to target some eager passengers, who currently feel dissuaded to board. India imports defence equipment worth over $6 billion, and the offset policy to leverage these imports to create local manufacturing hasn�t been a thundering success.
gloom, there are happy passengers engaged in sunrise industries such as renewables, estimated to account for 26 per cent share of the global power generation by 2020, and communication electronics, which grew at 6 per cent in 2015.
A strong local market is a prerequisite for a global manufacturing base. The Prime Minister has rightly focused on these opportunities through initiatives such as Solar Alliance, Digital India, etc.
To add muscle to these initiatives, it would be appropriate to create coastal special manufacturing zones (by whatever name called) for these industries, connected to globally competitive ports and airports, with ready to use land and other infrastructure, and public processes that are designed to deliver experience, ranking within the top 20 in terms of ease of doing business.
This is a well proven strategy adopted by south-east Asian nations and China, which succeeded in their aspiration to become the shop floors of the world. Transforming the whole of India to become the most competitive manufacturing destination is no doubt the most sustainable route, but that is like boiling the ocean. A selective approach is unavoidable for quick results.
In the time available before people become enthused to board the bus in large numbers, massive work needs to be done to remove some major roadblocks on the way. These include ease of exit (by whatever name called), trade policies that facilitate market access (regional or multilateral pacts), and predictable and stable tax policies (especially on transfer pricing, GARR), etc.
There is a strong case to reserve some seats for labourintensive services in the Make in India bus, such as tourism, back office, etc. Since we have a more natural competitive advantage in these, we are likely to attract more passengers for these seats.
The journey is uphill, but exciting and achievable with focused leadership.
