Brand India: Where ‘Atithi Deva Bhava’ Meets Global Investment Excellence

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Prime Minister Narendra Modi
Honorable Prime Minister Narendra Modi's Presence Underscored the Summit's Significance on a National Scale

Atithi Deva Bhava,’ or ‘Guest is God,’ is foundational to our ethos in India and has been a cornerstone of our ‘Incredible’ identity. When this principle extends to the realm of manufacturing, it introduces a unique perspective. India currently holds the position of being the 22nd most visited country globally. Consider the potential impact when a guest, akin to an investor setting up a manufacturing unit, chooses India. The growth prospects for our nation under such circumstances are profound. The hospitality that India extends is unparalleled, creating an environment where no one else can welcome you quite like we do.

In the tapestry of India’s economic history, the narrative of its manufacturing sector unfolds as a saga of rise, fall, and resurgence. From the heydays of ancient and medieval trade routes adorned with diverse textiles to the ravages of British colonization that drained the riches of the land, the journey has been nothing short of tumultuous. The decline witnessed during colonial rule was a painful chapter, but post-independence policies and reforms ignited a spark of transformation. Fast forward to the 21st century, where the “Make In India” initiative, digitalization, and Industry 4.0 concepts are propelling India towards becoming a global manufacturing powerhouse. This article takes you on a captivating journey through the history of manufacturing in India, exploring the peaks and troughs, and envisaging what lies ahead in the promising landscape of the country’s manufacturing sector.

The Ancient Looms:

If we trace down the inception of manufacturing in India, we can see that manufacturing and production were an important part of ancient and medieval India as they facilitated trade relations.  Indian textile industry was famous among international trade routes because the diversity of India led to the production of different fabrics like muslin, cotton, and silk textiles. With the start of colonization in India and the establishment of trading posts in the 17th century, manufacturing through traditional handloom and weaving took a backseat. The British rule led to a drain of the country’s natural resources, as raw materials were exported from India to Britain leading to deindustrialization in India. According to Historian Rajat Kanta Ray, India’s textile industry especially the cotton industry saw a decline from the 1820s and till 1850 it reduced by 28%. Similarly, Bengal imports saw a steady fall and an increase in British imports by 93% in 1840. So, from accounting for 25% of the World’s Production output in 1750, it took a fall and just accounted for 2% of the productivity in 1900. The transfer of capital from India to England led to a drain in revenue and the economy and manufacturing suffered the most for decades to come.

Post Independence Renaissance

Post-Independence the country saw a big change in transforming the economy with policy changes and reforms. To get back on track, the country resorted to a five-year plan from 1951 to 1956 that laid down the basic framework for facilitating infrastructural developments and strengthening manufacturing processes through industrialization. During this period, the focus was given to heavy industries like iron and steel. In the years that followed independence, economic growth occurred despite the extensive interventions. The per capita GDP increased from the late 1940s and the 1970s at a reasonable annual rate of 1.4%.  Subsequently through the Import substitution industrialization (ISI) in the 1950s – 80s protective measures to regulate import and export were set in place. The industrial sector’s share of GDP rose throughout this time, rising from 11.8 percent in 1950–1951 to 24.6 percent in 1990–1991. The liberalization, privatization, and globalization (LPG) reforms in 1991 led to a major shift and transformed the manufacturing sector by making it more diverse and not limiting it just to the textile industry. A major technology, automobile, and pharmaceutical boom was observed post-1990s that completely changed the milieu of manufacturing in India. India’s manufacturing value added as a proportion of GDP grew from roughly 9.4% in 1991 to roughly 15.1% in 2019, according to data from the World Bank. With “Make in India” launched in 2014 the country is said to be on its way to becoming a 7 trillion-dollar economy by 2030.

Make in India – An Emotion of Million Hearts

One of the most impressive initiatives in Indian history, the Make in India initiative was unveiled on 15th August 2014 with the specific goal of accelerating the growth of the manufacturing sector. It involved several measures aimed at attracting more foreign direct investments (FDIs) by removing legal and administrative barriers to business establishment in India and allowing FDI into all industries except the media, defense, and space sectors.  Make in India introduced ‘Vocal for Local’ campaigns of India’s manufacturing sector to the world. Through Make In India, the country was able to secure over $50 billion in foreign direct investment (FDI), greatly bolstering the nation’s industrial industry. Even with these numbers, the industrial sector still faces issues like slow structural reform and jobless growth, so this is merely a starting point. The importance of Make In India lies in the fact that the scheme wishes to improve the ease of doing business and the government instead of being a regulator has become the facilitator. Through improved research and innovation and the creation of smart cities Make In India is ready to transform the infrastructure of the manufacturing sector. Moreover, a new sector for FDI has been created in Defense, Insurance, Medical Devices, Construction, and Railway infrastructure. Therefore, the objective of Make in India is to change the position of the country’s manufacturing processes through technology. It promises increased employment, increased production, revenue generation, and FDIs fostering a self-reliant approach.

Current Horizon

The Government of India’s initiatives like PLI and Make In India are promising steady growth to the manufacturing sector in India. The 17% of the country’s GDP as well as approximately 27 million of the population is dependent on manufacturing and therefore the sector plays a crucial role in economic development. In FY 2022 the country’s manufacturing sector grew by 210 percent owing to policies and digital transformation that promised a seamless, automated manufacturing process. The Output in the manufacturing market in 2023 is estimated to amount to US$1,313.00bn. Even amidst a global slowdown owing to global political tension, Ficci projects that the growth momentum will keep on increasing in Fiscal Year 2023-24 too. However, at the same time, there’s a need for a revamp of the country’s infrastructure to facilitate and secure the growth in manufacturing sectors. Moreover, there is a need for trained skilled labor and the labor dynamics need to be revamped for good to regulate the sector and provide a workforce.

Future Ahead

If projections are to be believed then India’s manufacturing output is said to reach 25% by 2025 and the size of the Indian economy might double to 7 trillion dollars. This will only be possible if the present growth is maintained. To become a high-income country by 2047, the manufacturing sector in India needs to strengthen and grow.  Thereby, through innovation, sustainability, and international cooperation India will surely become a global manufacturing powerhouse.

REFERENCES

https://www.tcd.ie/Economics/assets/pdf/SER/1999/Hambrock_Hauptman.pdf

https://en.wikipedia.org/wiki/Economic_history_of_India#Ancient_and_medieval_characteristics

https://en.wikipedia.org/wiki/Economy_of_India_under_the_British_Raj

https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/sep/doc2022925109001.pdf

https://www.researchgate.net/publication/326081003_Make_in_India_Initiative_A_key_for_Sustainable_Growth#:~:text=The%20Make%2Din%2DIndia%20campaign,made%20by%20the%20Indian%20Government.

https://crawford.anu.edu.au/acde/asarc/pdf/papers/2007/WP2007_07.pdf

https://timesofindia.indiatimes.com/blogs/voices/how-is-india-emerging-in-the-global-manufacturing-sector/

https://www.statista.com/outlook/io/manufacturing/india

https://www.financialexpress.com/policy/economy-india-to-be-a-7-trillion-economy-by-2030-cea-3310766/

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