Make in India

If India’s manufacturing labour cost is  $1.72/hour  which is half of that of China’s, why can’t it overtake China in manufacturing supremacy? Having large scale manufacturing plants in India where the domestic market itself swallow large percentage of manufactured goods could be a double advantage for global corporations, and with incentives for exports could be the icing on the cake. 

What should the government do to give a fillip to the growth momentum of the manufacturing sector?

The cost of transporting a tonne of freight over a km works out to Rs 2.28 by road, Rs 1.41by rail and Rs 1.19 for waterways. Using ports in a big way with the ‘Sagar Mala’ can help India lower logistics costs substantially.

Ease of enforcing contracts and dispute resolution should be made easier: India ranks still ranks 164 amongst 190 countries on enforcing contracts, according to the World Bank. On an average, it takes almost four years for a dispute to be resolved in India compared to less than six months in Singapore. 

The government support for adoption of best practices to reduce cost of production with 3D printing and automated real-time processes in manufacturing, would serve the industry in the long run. 

The environmental and the land acquisition  issues would be an inevitable dampener that would apply brakes, but it is the political ingenuity that would save the day.

With government’s focused efforts, the ecosystem looking much better now, even with global trade wars hotting up, primarily because of large domestic market. The vast market has only been simplified but also unified with GST ensuring easier movement of goods across its states’ borders. Changes are becoming visible: A shining example is South Korean giant Samsung’s mobile phone factory being set up at Noida, which will be the largest in the world, from where close to 30% of the handsets made there will be exported. Can Samsung do in Electronic mobile manufacturing, what a Maruti did for auto industry in 1990’s? 

Of the top five defence spenders in the world – the US, China, Saudi Arabia, Russia and India — the Saudis and Indians are the most ‘import-dependent’. The actual defence expenditure, on arms and arsenals acquisition, has also on the decline primarily due to the reluctance of those in power to standup against controversies and the public glare threatening to seriously impede the probity. This has taken monstrous proportion in the last tenure of UPA, seriously compromising the defence preparedness. Mr. Antony was portrayed as ‘holier than cow’ in erstwhile UPA through questionable ‘inaction’.

The opportunity of creating a manufacturing base with the resources available, should have been exploited in the post independent era, but had sadly been missed. The indigenisation of defence manufacturing has always been thwarted by powerful lobbies both within the armed forces, and government favouring imports over domestic manufacture. All said and done, Creating and sustaining a private sector in defence manufacturing demands a strong political will and far sighted statesmanship. It is always fraught with the risk of controversy for the simple reason that it is an industry with only one buyer — the government.

Well meaning progress of ‘Make in India in defence manufacturing’ will depend on how the narrative takes shape with an issue such as Rafale. It all depends on how the current regime is able to confront the highly articulative media that could easily convince a credulous Indian mind with its ‘there can’t be smoke without a fire’ attitude. In spite of non-consensus between the opposition political parties on any murkiness in the ‘deal’, congress looks at Rafale as the only last straw left in resurrecting its corruption-sullied image- confront with the same weapon! What is least expected of as a responsible political party, it must stop hurting the cause of self-reliance in defence and ought to be more ‘far-sighted’.

Defence manufacturing is major sector that has a huge potential, has already been sighted by the present regime! A disruptive initiative of such a magnitude would obviously create ruckus to start with before settling  down! As in any action filled thriller, fireworks is an inescapable default segment: Enjoy the entertainment episodes of a vibrant democracy!