Under the Ministry of Commerce of the Government of India and the Department of Industrial Policy and Promotion, Make in India or Public Procurement is a Scheme under the Foreign Direct Investment Policy. Based on the 2017 revision, it was stated that “it is the policy of the government of India to encourage ‘Make in India’ and promote manufacturing and promotion of goods and services in India. Under make in India, FDI Policy was reformed majorly to enhance investment allowance in various sectors and to enhance the ease of doing business. Other targets include, skill development, the Digital India Scheme, Infrastructure creation, Jan Dhan Yojna for the financial inclusion of all citizens, etc.
The primary goal of ‘Make in India’ is to make India a global manufacturing hub, by encouraging both multinational as well as domestic companies to manufacture their products within the country. The countries from all over the world would also bring along latest technology that India lacks. Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce, without Government approval.
In 1970’s import substitution, high taxes reduced foreign import to boost the internal economy in India without any competition. Although, while keeping that aim, it was understood that while imports were restricted, the exports fell pertaining to the low quality of products resulted from the lack of competition. Make in India on the other hand, promotes foreign investment, making the country globally recognized as a manufacturing sector and at the same time promoting “Made in India” to bring in competition and improve the quality of Indian products. It encourages domestic manufacturers to produce goods in the country by using factors of production abundant in India like land, labour, capital, entrepreneurship, and technology, thereby again generating employment opportunities for the Indian masses. It could as well result in the endorsement the Indian homegrown brands, building their brand equity. Promotion Indian brands through brand equity, exhibits its brand value, value of quality and value of material that Indian goods hone and further exhibit due to competition. Localization of foreign markets and ingrown brands further also gives an ecological benefit to the country by reducing transport and import energy and cost. On the flipside it also impacts the ecological footprint as setting up manufacturing industries requires natural resources like land, water, etc on a large scale. On the other hand, reducing transport energy helps in reducing shelf life of goods reducing long-term packaging costs and could help promote eco-friendly packaging.
The department of Industrial Policy and Promotion as for Public procurement also state that, “local content can be increased through partnerships, cooperation with local companies, establishing production units in India or Joint Ventures (JV) with Indian suppliers, increasing the participation of local employees in services and training them.” Moreover, It is important for the purchasing power of the common man to increase, as this would further boost demand, and hence spur development, in addition to benefiting investors. The faster people are pulled out of poverty and brought into the middle class through employment generated by these manufacturing investments, the more opportunity will there be for global business. Therefore, investors from abroad need to create jobs. India is to become the third largest consumer economy, providing the investors cost effective manufacturing and a handsome buyer with purchasing power. More employment means more purchasing power.