PM Modi's 'Make In India' Racks Up $222 Billion in Pledges

[noksss]

The "Make in India" summit in Mumbai that was inaugurated by Prime Minister Narendra Modi on the weekend has closed with $222 billion or Rs. 15.2 lakh crore in investment pledges.

Amitabh Kant, Secretary of India's Department of Industrial Policy and Promotion (DIPP), said he expected 80-85 per cent of the pledges to convert into serious business, much of it from foreign investors. It can take 18 months to three years for a memorandum of understanding to yield a final investment, he added.

Research commissioned by the free-market Friedrich Naumann and Cato institutes has found the rate of conversion of such pledges into real investments in India has typically been far lower - with no state exceeding 20 per cent.

Among investments signed in the last seven days were a commitment by Oracle Corp for $400 million to set up nine business incubation centres.

The week-long event is the boldest since PM Modi launched the initiative to emulate China's export miracle back in 2014.

On buzz alone, the effort got off to a great start, with the prime ministers of Sweden and Finland attending Saturday's gala opening hosted by PM Modi. Nearly 50,000 delegates from 102 different countries attended the summit.

But 20 months after PM Modi swept to power with a promise of growth and jobs for India's 1.3 billion people, executives say more needs to be done, including improving infrastructure.

More pressingly, key legislation such as a goods and services tax and land acquisition bill are stuck in parliament.

"Make in India is a great initiative and has created a lot of positive sentiments," Vikas Agarwal, general manager of mobile phone maker OnePlus in India, told news agency Reuters. "Now the government needs to follow up with policies. That includes providing custom duty and export incentives, tax rationalisation and removal of ambiguous land acquisition policies."

Make In India has scored major wins, including a pledge by Taiwan's Foxconn to invest $5 billion in a new electronics manufacturing facility.

That has helped foreign direct investment to nearly double to $59 billion last year, the seventh highest level in the world, according to the United Nations Conference on Trade and Development.

Yet in critical aspects, India remains far behind its goals.

The proportion of manufacturing to gross domestic product has been stuck at around 17 per cent for five years, below the government's goal to ramp it up to 25 per cent, according to the Boston Consulting Group.

India has only created 4 million manufacturing jobs since 2010, according to Boston Consulting. At the current rate, India may only create 8 million jobs by 2022, well below the government's goal of 100 million. ($1 = 68.4550 rupees)

PM Modis Make In India Racks Up $222 Billion in Pledges – NDTV Profit

 

[nik141993]

Let's see if these MOU turn into reality which is very unlikely in my opinion

 

[Chinese-Dragon]

The week-long event is the boldest since PM Modi launched the initiative to emulate China's export miracle back in 2014.

Modi has the right idea. Self-dependence is an important thing in this world.

It will be hard at first, but the payoff will be tremendous.

Yet in critical aspects, India remains far behind its goals.

India has only created 4 million manufacturing jobs since 2010, according to Boston Consulting. At the current rate, India may only create 8 million jobs by 2022, well below the government's goal of 100 million.

Much of Chinese manufacturing is now passing on to Southeast Asia, it's time for India to step up and grab the mantle of a manufacturing powerhouse. Business follows efficiency, and SE Asia is efficient, so India needs to step up their game.

 

[SrNair]

Modi has the right idea. Self-dependence is an important thing in this world.

It will be hard at first, but the payoff will be tremendous.



Much of Chinese manufacturing is now passing on to Southeast Asia, it's time for India to step up and grab the mantle of a manufacturing powerhouse. Business follows efficiency, and SE Asia is efficient, so India needs to step up their game.

We have some unique issues .SE Asians are small nations so they can be more efficient .
But India is a big nation but cant employ same measures because we are a democracy .
But I think at least 50 million jobs will create in this sector .Our demographic dividend is that much .Skilled youths will turn to whatever alternative they have.

 

[Chinese-Dragon]

We have some unique issues .SE Asians are small nations so they can be more efficient .
But India is a big nation but cant employ same measures because we are a democracy .
But I think at least 50 million jobs will create in this sector .Our demographic dividend is that much .Skilled youths will turn to whatever alternative they have.

If all the Indian states closely coordinate the creation of a strong national manufacturing base, it can become very efficient. But it requires a bit more centralization.

SE Asian nations are good, but definitely not unbeatable in this area.

 

[Abingdonboy]

Key word- "pledges".

It's worth noting but don't start celebrating just yet- let's see how much is converted into actual FDI.

It will be hard at first, but the payoff will be tremendous.

.

Well said.

If all the Indian states closely coordinate the creation of a strong national manufacturing base, it can become very efficient. But it requires a bit more centralization.

Hmmm, I agree to a degree. Things like the GST and LAB are needed to ensure uniformity in the legal/taxation protection of operating in India.

However, it is worth remembering that India is a federal nation and often refered to as a "union"- when you consider that states in India are as populous (and in many cases as wealthy) as many nations in the world (Bihar has almost 200 million people- 2/3rds of the US population, Maharastra has >100 millon) then it is also possible to operate on a state by state basis. For instance much of the automotive manufacturing is done in Chennai, much of the IT services are in Bangalore, financial services in Mumbai etc.

So it is possible for induvidual industries to operate in induvidual regions/states and in fact the Govt of India is encouraging this with their idea of "competitive federalism" which will reward those states who get their acts together and actively take measures to lure international investment (ease of doing business, infrastructure, education etc). Competiton, as conventional (capitalist) wisdom would tell us, would/should encourage all parties to perform better.


That said, there are many things the central government needs to take care of- "mega" infrastructure, securing favourable trade deals, macro economic policy etc etc

 

[Scavenger]

Its a good start. Let's see how much converts from MoU's to actual investments.

 

[Chinese-Dragon]

So it is possible for induvidual industries to operate in induvidual regions/states and in fact the Govt of India is encouraging this with their idea of "competitive federalism" which will reward those states who get their acts together and actively take measures to lure international investment (ease of doing business, infrastructure, education etc). Competiton, as conventional (capitalist) wisdom would tell us, would/should encourage all parties to perform better.

That's a good point actually.

I think in the end you need a mixture of both, and the balance will be different for different countries.

Only time will tell what the correct balance point will be.

 

[Echo_419]

If all the Indian states closely coordinate the creation of a strong national manufacturing base, it can become very efficient. But it requires a bit more centralization.

SE Asian nations are good, but definitely not unbeatable in this area.

We are depending on the cooperative Federalism thing to make the 'make in India' campaign a success

If all the Indian states closely coordinate the creation of a strong national manufacturing base, it can become very efficient. But it requires a bit more centralization.

SE Asian nations are good, but definitely not unbeatable in this area.

We are depending on the cooperative Federalism thing to make the 'make in India' campaign a success

 

[Abingdonboy]

That's a good point actually.

I think in the end you need a mixture of both, and the balance will be different for different countries.

Only time will tell what the correct balance point will be.

Rightly said, to optimise all possible benefits the states and central government need to work together, there is much the states have to do on their own (as they, and not the central government, allocate resources for transport, skill creation/education etc as well as setting very specific legislation that will affect ease of doing business within their state).

Although, I think this current govenrment is on the right track by seeking to leverage the federal nature of India as an asset rather than treating it as a liability or hinderance. Previous governments have been far more socialist/central-minded and have only had very limited success. Instead, some states did very well in very specific areas and other lagged behind (what used to be referred to as the BIMARU states).

But by establishing the fundamentals of growth/prosperity and saying to all states "we will provide you X and take care of national levels but who wins is entirely up to you and proportional to your ability to modernise, invest, educate/skill and attract investment" I think the new fits the Indian system better.

In short, establishing a meritocracy (to the best degree possible).

 

[Great Sachin]

jai ho ..Modi ji

 

[SR-91]

I truly believe that because of global economic slow down, India will the first beneficiary.

As investors loose faith in big economies, they will find comfort in India. India's economy is growing from within, laying a strong foundation.

 

[Abingdonboy]

I truly believe that because of global economic slow down, India will the first beneficiary.

As investors loose faith in big economies, they will find comfort in India. India's economy is growing from within, laying a strong foundation.

In my view, this will only be true of "hot money"- global business houses don't pump in vast amounts of capital on a whim but do so because of factors such as stable legislation, appealing conditions, uncaptured revenue etc etc. The kinds of capital investments being sought (in infrastructure and manufacturing) will only become economically viable in 7+ years and thus such decsions are not made on the basis of present day economic conditions (that can change from one quarter to another) but the reasons I have outlined.

In the long term India needs favourable global economic conditions in order to sustain its growth to buy its goods, to trade with it, to invest in it etc etc.

 

[GreenApple]

If all the Indian states closely coordinate the creation of a strong national manufacturing base, it can become very efficient. But it requires a bit more centralization.

SE Asian nations are good, but definitely not unbeatable in this area.

..wish Chairman Deng's vision was shared by our ..so called....communists.. err. islamist..

 

[Ind4Ever]

Modi ji Zindabad... Hindustan Zindabad

I can sense next 3 years are going to be a miraculous year for India...