INDIA CAPTIVATES
Make in India: A doorway to business opportunities
Make in India is the Indian Government’ s flagship program, intended to help turn India into a global manufacturing hub. It aims to:
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Promote the manufacturing of lowcost, eco-friendly and zero-defect products
Foster innovation
Enhance skill development
Protect intellectual property
Build best-in-class manufacturing infrastructure
In support of the Make in India initiative, the Government has embarked on a series of actions, including those outlined below:
1. New trade policy: export and import taxes on small volumes of goods have been abolished, and incentives have been introduced for export – oriented units( EOUs) and export processing zones( EPZs).
2. New labor laws: these include a“ single-window” labor compliance process for companies, simpler Provident Fund( compulsory employee insurance and pension) procedures and a new inspection scheme.
3. Simplification of regulatory compliance: to make doing businesses easier, companies can now obtain environmental approvals and licenses online.
4. Improvement of its resource management program: India has ample reserves of natural resources, including bauxite, coal and iron ore, that can fuel its manufacturing ambitions. The Government is taking steps to ensure they are used more efficiently. It concluded several coal block auctions in early 2015, enabling companies to access these resources. The Government is also encouraging solar and wind renewable power generation projects.
5. Focus on skill development: to ensure workers have the right skills, the Government launched its Skill India initiative to help the development of manufacturing. The initiative will train over 500 million young people by 2020 to make them more employable.
India ' s top FDI destinations
Share of FDI capital in 2014
The technology hub of India attracted more than 45 % of the investments in the TMT sector( electronic components, and software and IT services), as the Government offers 50 % capital subsidy on R & D units. Industrials( diversified) is picking up pace: foreign investors initiated six industrials projects worth US $ 236m in 2014, up from just one in the previous year.
Bengaluru
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The new industrial policy( 2014 – 19) is in place to attract INR 5t( US $ 83b) of investments and create 1.5 million jobs in manufacturing, particularly industrials.
Mumbai
The financial capital of India received most interest in the financial services sector, with 14 projects, worth US $ 734m, in 2014. The UAE was the top investor in the financial services sector, while the US is investing in the TMT sector.
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Rapid urbanization is happening in the suburbs nearby Mumbai( Navi Mumbai, Thane, etc.) as cost and resources constrain the city. This will open opportunities for financial services, technology and infrastructure sectors.
Delhi-NCR
In 2014, FDI in the Delhi-NCR region slipped to US $ 15b, from US $ 23b in 2013. The FDI landscape in the region is dominated by infrastructure investments, as the NCR region( nearby area to the capital city) continues to witness a high urbanization rate. Also, as the region hosts a vast talent pool, it is the hub of various MNCs, particularly in the business services domain.
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The Delhi-NCR region has developed into a strong business center, attributable to high talent availability in the region and also being the country’ s capital. As the urbanization rate and geographical spread of Delhi-NCR region expands further, it is expected to continue attracting investments.
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