make in india

Presented By Akshay Saini MBA 1st Sem

MAKE IN INDIAMAKE IN INDIA

Overview

• Make in India campaign was launched by Prime Minister Mr. Narendra Modi on 25th September 25th 2014

• It is a national program designed to transform India into global manufacturing hub

• The initiative is meant to cut red tape, spur foreign investment and transform India into a vibrant economy

• Twenty five sectors have been identified as priority areas including Automobile, construction, Food processing, IT, Defence, Aviation and many more

• Introduction of 24/7 e-portal to address the industry concern and get back to them 48-72 hours

• It includes major new initiatives designed to facilitate investment, foster innovation, protect intellectual property and built best in class Manufacturing Infrastructure



Sectors

AutomobilesBiotechnologyDefence ManufacturingFood ProcessingMedia and EntertainementPharmaceuticalsRenewable EnergyRailwaysOil and GasLeatherAviation

Textile and garmentsWellnessPortsMiningIT and BPMPortsRoads and HighwaysThermal powerSpaceConstructionElectronic System


Sector Growth Driver Reason to invest FDI policy

Automobile Passenger Vehicle are to increase at a CAGR of 16% between 2013-20Growing Working Population and expanding middle classIncreasing disposable income in rural agri-sectorFavourable government policies like lower excise duties, automotive mission planEasy finance schemes owing to which the auto finance industry has grown at the rate of 13% between 2008-13

By 2015 India is expected to be fourth largest automotive market volume in the world India’s car market has the potential to grow 6+ million unit annually 2020Emergence of large automobile clusterAn R&D: Strong support from the government

100% FDI is allowed in automatic route

IT AND BPMRevival in demand for IT services from US and EuropeIncreasing adoption of technology and telecom by customersHigh value client additions bigger than USD 1 million registering 13.5% growth

The IT-BPM sector contributes 8.1% of the country GDPIndia’s IT industry amounts to 7% of global marketRapidly growing urban infrastructure has fostered several IT centres

Upto 100% is permitted under automatic route

Food processingLiberalization and growth of organized retailRising income level and growing middle classFavourable economic and cultural transformation and shift in attitudes and lifestyle

A rich agricultural resource base A low cost of skilled manpowerAttractive fiscal incentives by state and central government in the form of subsidies, Tax rebates etc42 mega food parts are setup in PPP at an investment of 98 billion rupees

100% FDI is permitted in automatic route for most product

Chart showing scope of different sector under the Make in India campaign


Sector Growth Driver Reason to invest FDI policy

Textile and Garments Rising per capita income ,favorable demographics and shift in preference for branded productsIncrease in domestic demand is set to boost cloth productionFavourable policies of government of IndiaExpansion of retail sector with many global players entering the market

Road and highways

Second largest manufacturing capacity globally Accounts for 14% of world production of textile fibre and yarnAbundant raw materials and increasing demand for exportsIncreased penetration of organized retail

100% FDI is allowed in automatic route

An outlay of USD 3.8 billion for the highway sector has been provided in 2013-14The GOI aims to develop a total of 64340 Kms of national highwaysUnder various programmesThe rise in four wheeler and two wheeler vehicle ,Increasing freight traffic, strong trade will augument growth

The transport sector constitutes 6% of country GDP and 70% share of road sectorEmergence of private sector as a key playerEstablishment of major initiatives by GOI to upgrade highways in the country

100% FDI is allowed under automatic route

Construction

India has a housing shortage of 65 million million dwelling unitsIntroduction of new urban development mission which will help in the development of cities

Different levels of FDI based on different parameters

An investment of USD 1000 billion has been projected for infrastructure sectorEase access to funding for the sectorConstruction activities contribute more than 10% of India’s GDP

INDUSTRY POTENTIAL


I

2011 20160

20406080

100120140160

58.5

145

year

Automobile

Billion

2013-14 2016-170

20

40

60

80

100

120

67

100

Indus-try size

Year

Textile and garment

2013 20170

20

40

60

80

100

120

140

160

78

140Real estate mar-ket

USD billion

The total turnover of automobile sector in 2010-11 was USD58.5 billion ,turnover by 2016 is slated to be USD 145 billion

The domestic textile and apparel industry in India is estimated to reach USD 100 billion by 2016-17 from USD 67 billion in 2013-14

As per the industry estimate ,the Indian Real estate market is estimated to be USD 78billion in 2013 and is expected to grow to USD 140 billion

Drivers


Development of industrial cluster and new smart cities will foster India’s manufacturing infrastructure and innovation capacity

India’s high value industrial sectors-Defence ,Construction and railways are now open to global participation Policy in Defence sector liberalised and FDI cap raised from 26% to 49% 100% FDI under automatic route permitted in construction ,operations and maintenance in specified rail

infrastructure projects Opportunity for domestic companies having leadership in innovation and technology to turn themselves into

a global champions Increasing Venture capital and private equity activities will further provide the impetus to the domestic

companies Implementation of major reforms could push India’s Gross Domestic Product to over $4.5 trillion by FY20 Sme’s contribute 90% of all industrial units and 40% export within the manufacturing sector

According to Justin Lin ,A former chief economist at the world bank,China will shed 85 million manufacturing

jobs in the next few years because of the fast rising wages.India can attract some of these jobs if it can cut

bureaucratic hurdles that scare away new business.


Process of applying to industrial licence made online on 24X7 basis through e-biz portal

Services of all central government will be integrated with the E-biz

Validity of industrial licence extended to three years

All return should be filed online through a unified form

Doing business in India just got easier-new delicencing and deregulation measures are reducing complexity, and significantly increasing speed and transparency

Ease of Doing Business

Barriers


• The manufacturing sector has performed poorly by recording a expansion of barely 1.1% growth in 2012-13 followed by a contraction of 0.7% in 2013-14

Boost to Manufacturing sector

• From 2010 to 2012,the country’s stock of FDI just totalled 12% of GDP while the developing country average was 30%

Need to increase FDI

• The growth has continued to slow down and has been running below 5% for the last 2 years .For a massive increase in the growth rate by 4% to GDP,$ 200 billion of FDI would be needed

Help in reviving growth

Low share of manufacturing

Lack of ease of doing business

The current share of manufacturing sector to India’s GDP is only 15%.It compares poorly to other Asian nations

India ranks 134th out of 189 countries in World Bank ease of doing business Index.The world bank report notes that it takes 27 days to start a business in India.In

Singapore it takes two and a half days

Increased Investment Activity


Increase in the FDI limits in various sectors will encourage foreign investment by various types of investors like Pension Funds, Foreign trusts, Private equity firms and partnership firms.However there are certain sectors where limit is fixed

by the government of India

Increased incentive provided by Government includes:Investment allowance at the rate of 15% to manufacturing that invest more than INR 1 billion in plant and machinery

Incentives available to unit setup in SEZ ,NIMZ and EOU

Exports incentive like duty drawback, Duty exemption, focus product and market schemes

Area based incentive like unit setup in north east region, Jammu and kashmir

Sector specific incentives like M SIPS in electronics


Thank You

make in india

Economy & Finance