Ahead of the Quad Leaders’ Summit, Prime Minister Narendra Modi had a roundtable in Tokyo with the top CEOs and executives of Japanese firms and invited them to “Make in India for the World”. The Union Minister for Commerce and Industry, Piyush Goyal, recently made a visit to the United Kingdom. While in London, he addressed a sectoral roundtable of investors, including Fintech, venture capital funds, and banks, and outlined how “Make in India for the World” enables British companies to leverage cost competitiveness, scale, and skill to become global champions. So, is it just a catchy slogan that the Modi government is using to hoodwink the general public, as the opposition claims, or is there more to it as an aspect that requires analytic dissection and elaboration at the same time?
Putatively, the main object of the Make in India scheme was to increase manufacturing in India to create job opportunities and to ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2025, which is presently revolving around 17% in 2021 and was around a tad over 14% in 2016. The opposition parties generally poke the mullock at the “Make in India” schemes, claiming that they have-ostensibly-failed to produce the desired results despite the government’s laborious and persistent efforts, whereas supporters of the ruling party present rosy pictures and endless arguments to demonstrate the success story of Make in India.
All these questions can be answered using vital relevant data, because data speaks louder than arguments. The export of merchandise products and FDI in the manufacturing sector is the best parameter to judge the success or failure of the scheme. If India’s manufacturing base is expanded, exports will naturally increase, and vice versa. The FDI inflow meter in manufacturing can also be a barometer to measure the success or failure of the scheme.
From FY 14-15 to FY 17-18, the export of manufactured goods was around Rs 17-19 lakh crore. There was a sudden spurt in merchandise exports in FY 18-19, clocking an export turnover of Rs 23.07 lakh crore, registering a growth of 17.95% YOY (year-over-year). The Coronavirus pandemic had halted this growth again for two years, and the export of merchandise produced a reduction of Rs 21.60 lac crore for FY 20–21, but in FY 21–22 it has again increased to Rs 31.46 lakh crore, registering a YOY growth of 45.72%, which is a historical one and probably the highest in recent decades in terms of value and growth percentage. People may argue that growth in rupee terms is higher due to the depreciation of the rupee, but exports in dollars for FY 2021-22 are also pegged at $421890 million, representing 44.58% year on year growth.
India is now not only one of the largest importers of crude oil and petroleum products, but petroleum products also account for the highest export in the previous fiscal year, accounting for around 21% of total turnover, totalling more than 6.5 lakh crore. The biggest contributor was pearls, followed by gems, which constitute around 8.5% of India’s total exports. Iron steel and medicinal products are not far behind, which are also around 6.5% and 6% of total export turnover. The product categories of top export items themselves show that the manufacturing base is making inroads in India.
After the Coronavirus pandemic, European countries are now considering India as a trusted partner, which is evident from the fact that exports from India registered the highest growth in EU countries. The export of merchandise goods to EU countries has reached its highest ever turnover of more than 6.40 lac crore, registering a growth of more than 60% from the immediate financial year. Surprisingly, the Netherlands became the largest importer of Indian merchandise products, importing more than 90K crore in value, up from around 45K crore the previous year. The success story of Make in India can also be seen in another segment, which is the electronic segment, including telecom instruments. The world’s leading companies have made India the assembly point for their electronic products, with exports in this segment exceeding 1.10 lakh crore in fiscal year 2021-22. Telecom instruments alone clocked an export turnover of more than 55 K crore in the last FY.
More often than not, Gujarat remains a leader in exports, which accounts for more than 30% of India’s exports alone, registering a growth of around 110% from the previous year. The exports from Gujarat were around 4.50 lakh crore in the immediate financial year, which has now reached a whopping value of more than 9.80 lakh crore. Likewise, FDI in India was around 4.5 lakh crore in the current year, which was around 2.5 lakh crore in FY 2015-16. Computer software and hardware segments attracted the highest FDI, which was more than 1.10 lakh crore, followed by the automobile industry, which attracted more than 55k crore FDI compared to 12k crore in the previous year. Despite the fact that exports of manufactured goods have reached an all-time high, India is concerned that the trade deficit is widening due to increased imports. India’s trade deficit in the current financial year was 14.4 lakh crore, which was down from around 7.50 lakh crore in the immediate previous year, but the common man can vouch from the above data that if processes, rules, and regulations are made simpler with strict supervision, we can become a substitute for China in universal trade, especially in EU and African countries. The Make in India initiative will continue.
In the coming years, an increasing number of manufacturers are anticipated to establish operations in India. Prime Minister Modi is personally driving a wave of changes that will modernise and open up India’s economy. As a result, India’s economic climate is becoming progressively freer. Assuredly, India has no time to relax. It must continually strive to become the most popular business destination on the globe. We have travelled far, yet our journey is not over.
Yuvraj Pokharna is an independent journalist and columnist. Mukesh Kabra is a Surat-based Chartered Accountant practising for 25 years. The views expressed in this article are those of the authors and do not represent the stand of this publication.
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