Prime Minister Narendra Modi launched the 'Make in India' campaign with much fanfare on Thursday, exhorting investors to think FDI with a twist - "First Develop India".
Investments in manufacturing would lead to jobs; more jobs to more purchasing power for consumers, which eventually would help industry realise the potential of India as the great bazaar. India's demographic dividend, Modi said, ought to be linked to demand.
Modi hinted his clarion call to global manufacturers hinged on "effective governance", not just "good governance". The whole campaign has three pillars - improving the ease of doing business by de-licencing and de-regulation, enabling infrastructure such as industrial corridors and opening up FDI (foreign direct investment) in sectors such as defence, construction and railways.
Effective governance also hinges on a new mindset. Modi released the campaign's logo and website that talks of a new way of wooing investors. India will relate to investors "not as a permit issuing authority but as a true business partner." Dedicated teams will guide first-time investors across 25 identified sectors, which include automobiles and automobile components, aviation, biotech, chemicals, construction, defence manufacturing, electronic systems, food processing, mining, oil and gas, pharmaceutical, ports, railways, renewable energy, roads and textiles among others.
The 'Make in India' campaign , in many ways, puts a structure to different initiatives the government initiated to kick-start the manufacturing sector, which contributes about 15 per cent to India's gross domestic product.
The government had earlier made online the process of applying for Industrial License and Industrial Entrepreneur Memorandum, which is expected to ease the filing of applications and payments.
In addition, the government excluded a number of components from the purview of industrial licensing. The government also did away with the inverted duty structure for many products that made domestic manufacturing uncompetitive- importing a finished IT hardware product, for instance, was more lucrative than manufacturing and selling it in India because of prevalent duties on electronic components used.
The government has also exempted all inputs and components used in the manufacturing of personal computers from a four per cent special additional duty (SAD).
Modi's promise of being a "proactive facilitator" is going down well with industrialists, many of whom crowded to hear the Prime Minister launch the campaign in New Delhi. The government lined up the industry's who's who - all of whom pledged support to the campaign and said they were "profoundly inspired by the boldness of Modi's vision". Speakers at the event included Tata Group Chairman Cyrus Mistry, Reliance Industries Chairman Mukesh Ambani, Wipro Chairman Azim Premji, and Chairman of the Aditya Birla Group K.M. Birla, among others.
Modi's 'Make in India' launch comes days before his visit to the United States. Trade representatives are hoping this will begin a new era in the economic relationship between the two countries.