The Make in India initiative that was announced by Indian Prime Minister, Narendra Modi in his Independence Day speech in 2014 was met with a lot of cheer by India’s manufacturing industry. The campaign was initially directed towards small and medium enterprises as well as large enterprises to manufacture in India, however, hardware-led technology startups who had barely thought of making in India are also stepping up to the campaign now.
Nihal Kashinath, who founded IoTBLR that encourages Internet of things via events and workshops stated that in a certain way, the move has motivated many people to consider manufacturing here as before the campaign, nobody had even thought of considering it and everyone would say that they needed to do the prototyping and go to China or Taiwan.
Grey Orange, that develops robots for warehouse automation is now manufacturing in India. The company has garnered $30 million from venture capital firms like Blume Ventures and Tiger Global.
The Make in India campaign has an array of initiatives which include allowing complete or partial foreign direct investment in 25 sectors. These include automobiles, aviation, biotechnology, defence manufacturing and electronic systems. However, the three significant announcements which were important to the startups included manufacturing incentives, focus on skilling labour and a simplified intellectual property regime.
Stakeholders believe that it may be too soon to celebrate this initiative as we will only be able to see major benefits within the next three to four years. At present, there are challenges like infrastructure, connectivity and skilled manpower supply.
As per India Electronics and Semiconductor Association’s (IESA) president, M.N Vidyashankar, “You need to give it two to three years to see the kind of traction that you are looking at. If you look at the likes of Micromax, Karbonn and Lava, if these big players are coming in a big way, the entire ecosystem will get a major fillip. Make in India covers both venture capital-funded start-ups and small and medium enterprises. It also covers large enterprises. Start-ups can join hands with a partner and such a move will help in branding as well.”
A major movement had come in August 2014 when Foxconn Technology Co Ltd had made an announcement to invest $5 billion for setting up manufacturing units in Maharashtra over the the span of the next five years. This re-entry by Foxconn has motivated other electronics manufacturers to set up units here and begin the process of making a comprehensive, ground-up electronics supply chain which is necessary for the Make in India drive.
In 2015, there were many international businesses as well as domestic phone makers, who have set up their manufacturing base in India. Lenovo Group, Meizu Technology Co. Ltd have entered the market with plans of making their handsets in India, apart from a host of others.
Apart from phone manufacturers, start-ups in the defence sector have also claimed that they have benefited from this move. The armed forces and multiple state enforcement agencies are their clients. This has been primarily due to the shift in the FDI limit in the defence sector from 24 per cent to 49 per cent along with non-repatriable investments by non-resident Indians and persons of Indian origin at face value with Indian investment accounts for the main reason.
However, experts have pointed out that the Make in India initiative is geared more at small and medium enterprises than venture capital-backed start-ups.
