It has been a decade since the Make in India initiative was launched in 2014 by Prime Minister Narendra Modi. Back then, the vision projected by the initiative was ambitious: to transform India into a global manufacturing hub.

The plan sought to boost the manufacturing sector, enhance job creation, and increase the country’s share in the global value chain. However, as the initiative approaches its tenth year, investors and analysts are still divided on its success.

Take a look at the key successes and persistent challenges highlighted by recent data to get a complete picture of what Make in India has achieved in this last decade.

• Despite high-profile investments, manufacturing's contribution to India's GDP has steadily declined.
• Make in India facilitated FDI but hasn’t significantly transformed the broader manufacturing landscape.
• Employment in manufacturing fell by 15.7 million between 2016 and 2023, raising concerns.
• FDI remains concentrated in a few sectors, leaving many industries and regions underserved.

One of the most publicised victories of the Make in India campaign was the inauguration of the Samsung smartphone factory in Noida in 2018, which was then the world’s largest mobile factory. This establishment not only symbolised India's potential as a manufacturing hub but also raised expectations that the initiative would attract significant foreign investments and create millions of jobs.

In the initial phase, the government focused on facilitating investment and improving the ease of doing business, hoping that these reforms would trigger a manufacturing revolution.

However, high-profile successes like the Samsung factory have been far and few. Data from both the World Bank and RBI reveals that while foreign direct investment (FDI) in India has improved in nominal terms, it has not dramatically changed the overall landscape. What’s more concerning is that the contribution of manufacturing to India’s GDP has steadily decreased, from 18.6% in 1995 to approximately 14.7% in 2022–23, the lowest in five decades.

Make in India has facilitated some major investments in sectors like electronics and semiconductors, but the broader picture remains less optimistic. Despite the government’s efforts, including the launch of production-linked incentive schemes, investments in manufacturing have not seen much growth. According to recent research, the share of manufacturing in India’s gross value added (GVA) has stagnated, and fixed capital formation in the industry (as a percentage of GDP) has remained largely unchanged since the launch.

One of the primary issues is excess capacity. As noted by analysts in 2018, many Indian companies had over-invested in the years leading up to the initiative, especially before 2012. These companies are now struggling to absorb this capacity, leading to delayed investments in manufacturing infrastructure. This challenge is compounded by global economic trends like rising protectionism, making it harder for India to compete with other manufacturing powerhouses like China.

Another key objective of Make in India was to create millions of new jobs. However, the data suggests a significant decline in employment within the sector. Between 2016 and 2023, the number of jobs in the sector fell by almost 1.57 crore (15.7 million), a worrying trend that highlights the initiative’s failure to fulfil one of its most critical promises. While the COVID-19 pandemic undoubtedly caused a part of this decline, the drop in employment began even before 2020, signalling deeper issues within the sector.

One reason for the decline in jobs could be the emphasis on capital-intensive, high-tech industries rather than labour-intensive manufacturing. While investments in sectors like semiconductors and electronics are essential for long-term growth, they may not generate the vast number of jobs initially anticipated by the initiative. This shift suggests that the government needs to recalibrate its approach to ensure that both high-tech and labour-intensive sectors receive adequate attention.

FDI is usually seen as a key metric for the Make in India initiative. In recent years, India has seen a steady flow of FDI, particularly in sectors like electronics, pharmaceuticals, and automobiles. However, when measured as a percentage of GDP, FDI levels have actually decreased since the launch of the initiative. Between 2007 and 2015, FDI averaged 2.14% of GDP, but from 2014 to 2023, this figure fell to 1.76%.

Most FDI is concentrated in a few sectors and regions, leaving vast parts of the country and other industries underserved. The reliance on foreign investments to drive the manufacturing sector also raises concerns about the long-term sustainability of this growth amidst the global shift toward protectionism.

Despite these challenges, the Make in India initiative has not been a total failure. On the positive side, the government’s introduction of PLI schemes, tax incentives, and import tariff adjustments shows a willingness to adapt and course-correct. However, the key question remains: will these policies deliver the intended results in the long run?

For Make in India to truly succeed, the focus needs to shift from attracting big-ticket investments to addressing fundamental structural issues within the manufacturing sector, such as excessive bureaucracy, complex labour laws, and inadequate infrastructure.

Additionally, policymakers should consider the cost-benefit ratio of the initiative’s various incentives. While PLI schemes have attracted some of the world’s largest manufacturers, they often favour larger firms over smaller players. This could stifle innovation and job creation in the small and medium enterprise (SME) sector, which is vital for sustainable economic growth. A more inclusive approach that empowers smaller firms and promotes both high-tech and labour-intensive industries could help balance the initiative’s benefits.

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