Before will substitute imports have been under development

Before Make in India, India used to allocate about 1.8% of its GDP towards defence spending, of which 40% was allocated to capital acquisitions and only about 30% of India’s equipment was manufactured in India, mainly by public sector undertakings. Even when defence products were manufactured domestically, there was a large import component. All these factors made the Indian defence market one of the most attractive globally and provided an immense opportunity for both domestic and foreign players in the defence sector. The Centre is attempting to boost MSME sector’s contribution towards indigenous manufacturing in defence from the present 20-30 to 70 per cent in the next five years under its ambitious ‘Make in India’ programme. Make in India initiative has helped the defence ministry save more than Rs 1 lakh crore worth of foreign exchange. In the past two years, as many as six air defence and anti-tank missile projects have been built indigenously by the DRDO. In keeping with the ‘Make in India’ initiative, the defence ministry has asked the Defence Research & Development Organisation to create a “master list” of its technologies that can be commercialised and given to private Indian industries for manufacturing and export, besides looking at tax concessions for domestic producers. Many Senior Defence Officials believe that Make in India is also going to help the development of the indigenous defence industry as the money which would have been transferred to foreign vendors would now be spent within the country and will also develop the capabilities of the indigenous players. The projects where the government has decided against the foreign vendors and gone for DRDO’s Made in India products include some of the missiles which will substitute imports have been under development for the last several decades.The Government of India has treated the electronics sector as a priority under its “Make in India” program. This scheme promotes manufacturing in India to boost job creation and skill enhancement, facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure. In line with this, it has announced several policy initiatives. It has also taken steps for creating a business-friendly and governance-oriented financial and economic environment. This has resulted in various Indian and global manufacturers announcing their expansion plans.While Make In India Campaign is in the full swing, especially in Defence, Electronics, Automobiles sectors etc., experts have varied opinion on how successful the campaign has been. A majority believes that the policy has not been able to achieve the desired results with FDI not been directed in the focus areas.Make in India campaign was launched to create employment and self-employment opportunities for the youth. And the way to do this, according to Make in India, is to increase the share of manufacturing in India’s GDP to 25% by 2022, which is expected to generate approximately 100 million jobs for Indian workers. Responding to the lifting of foreign direct investment (FDI) caps in several sectors, efforts to improve the ease of doing business and of course Prime Minister Modi’s frenetic wooing of investment in foreign travels, gross FDI flows to India jumped 27% to $45 billion in 2015-16, an all-time high. Even the Finance Ministry’s usually measured Economic Survey 2015-16 touted the FDI increase as a success for Make in India. Make in India specifically concerns manufacturing. After an encouraging jump to a record $9.6 billion in 2014-15, FDI in manufacturing actually fell to $8.4 billion in 2015-16. Furthermore, the percentage of FDI flowing to manufacturing, which has been in the range of 35-40% for the past four years, dropped to 23% in 2015-16.

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