Government set to push “Made in India” manufacturing

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The government of India is all set to provide a big push to help organizations look for local manufacturing in India

In its bid to promote Indian products within the country, the Ministry of Communications and IT is all set to issue a guideline suggesting 30% procurement of the domestically-manufactured electronic equipments and IT focused peripherals for all the public sector units (PSUs) and government undertakings.

This important gesture comes at a time when India Inc is looking for a big boost in order to spur the growth of localized manufacturing within the IT and networking domain. In this direction, the National Manufacturing Competitiveness Council (NMCC) has come up with its set of recommendations as well as the TRAI has also attempted to develop a Telecom Equipment Manufacturing Policy (TEMP).

This policy advocates that a “Made in India” product should have a local value addition at the rate of 25% in the first year of production and this percentage should go upto 45% by the fifth year.

So far the Indian government has allowed 100% FDI in electronics and IT. On the other hand, telecom equipment manufacturing policy paper justifies the push for domestic manufacturing ecosystem saying that WTO (world trade organization) does not discourage countries to develop their policies in order to promote domestic manufacturing for their own specific regions, as this eventually leads to greater development of GDP.  

It may be recalled that the government has been working towards creating an ecosystem for domestic manufacturing over the past many years and this is the reason independent bodies like TRAI have been quite aptly giving their recommendations on this. As we move towards bigger intake for IT devices, there is already a growing need for encouraging manufacturing of IT components and products locally in India.

Moreso, today the industry requires policies that will foster a sustainable ecosystem for innovation, R&D and manufacturing and this is what the government is likely to achieve by this initiative.

This initiative would encourage companies to opt for local manufacturing of products and also encourage towards the development of a local IT supplier ecosystem. This is what global majors looks forward to while setting up their manufacturing plants anywhere in the world.