‘Make in India’ campaign: Opportunities for investors

Conducive business climate: The key aspect of the Make in India campaign is to provide a business friendly environment for doing business in India wherein the primary objective is to establish a single point of contact for investors. The government has launched a 24/7 e-portal (www.makeinindia.gov.in) for assisting and addressing concerns of investors and has set up an investor facilitation cell to guide and assist investors.

Additionally, the government will also be simplifying the regulatory environment by reducing the bottlenecks and bureaucratic hurdles and initiating other measures such as:
• executing new initiatives to integrate services of all central government departments & ministries which will serve as a single window IT platform for services;
• providing exemptions from certain rules and regulations related to labour, environment etc. and automating the process of clearances and compliances with centre and state authorities to provide regulatory clearances within defined timelines. For this, the government has recently launched various schemes to address the requirements of employers as well as workers under the labour laws. These schemes include a universal account number (UAN) for subscribers of the Employee Provident Fund, a new labour inspection system and an online compliance system where employers can submit a single common return on compliance under various labour laws;
• introducing a system of self-certification for all non-risk, non-hazardous businesses wherein no inspection shall be undertaken without the prior approval of the head of the concerned department; and
• repealing archaic laws of India for which obsolete legislations that have outlived their utility are being identified.

Incentives to investors: The government has provided various incentives for investors in the nature of tax incentives and export incentives. It has also relaxed the foreign direct investment (FDI) policy in areas such as railways where 100 percent FDI has been permitted in building infrastructure in the sector and defence where the conditions have been liberalised and FDI increased from 26 percent to 49percent. Easing of FDI norms in insurance and construction development sector is also proposed.
In addition, other measures have been taken including simplification of the procedure of applying for Industrial license and extending its initial validity period and exclusion of major components of defence products’ list from industrial licensing. Further, twenty-five key sectors have been identified by the government which would be treated as priority sectors having special focus and additional incentives for investors including automobile, railway, construction, food processing, information technology, defence, aviation etc.

Infrastructure: The campaign has put special focus on building industrial corridors across India which will consist of new smart cities and industrial clusters. These will be developed with an objective of creating smart sustainable cities where manufacturing will be the key economic driver, which will result in increasing the share of manufacturing in the GDP of India and will project India as a global manufacturing destination of the world.

Impact of the campaign: Within less than a month of the launch of the campaign, an immediate impact has been witnessed with Standard and Poor’s revised rating of India from “Negative” to “Stable” owing significantly to the government’s willingness to implement reforms to restore India’s growth potential. Foreign investors have started showing interest and joining hands with Indian companies to manufacture in India.

The ‘Make in India’ campaign would not only remove the hurdles causing impediments in the economy for achieving high growth sustainability but would also tap India’s potential to become the top investment destination in the world. The recent developments after the launch of the campaign show that the long term global outlook for India continues to be positive making it more conducive for the investors to enter the Indian market. Thus, with efficient and welcoming administrative machinery, an enormous opportunity awaits investors who propose to invest in India.