Make in India: Challenges & Prospects

Make in India: Challenges & Prospects

Integrating “Assemble in India” into Make in IndiaDOMRPriority 1


From UPSC perspective, the following things are important :

Prelims level : Make in India

Mains level : Expected outcomes of the said integration

Giving a new dimension to ‘Make in India’, the Economic Survey 2019-20 suggested that the government should integrate ‘Assemble in India for the world’ into ‘Make in India’ to boost exports and generate jobs.

Assemble in India

  • Survey says India has unprecedented opportunity to chart a China-like, labour-intensive, export trajectory.
  1. By integrating “Assemble in India for the world” into Make in India, India can:
  2. Raise its export market share to about 3.5 % by 2025 and 6 % by 2030.
  3. Create 4 crore well-paid jobs by 2025 and 8 crore by 2030.
  • Exports of network products can provide one-quarter of the increase in value added required for making India a $5 trillion economy by 2025.

How to harness the situation?

  • The US-China trade war is causing major adjustments in global value chains and firms are scouring alternative locations for operations.
  • Even before the trade war began, China’s image as a low-cost location for final assembly of industrial products was rapidly changing due to labour shortages and increases in wages.
  • These developments present India an unprecedented opportunity to chart a similar export trajectory as that pursued by China and create unparalleled job opportunities for its youth.
  • As no other country can match China in the abundance of its labour, we must grab the space getting vacated in labour-intensive sectors.

Key suggestions made by the Survey

Survey suggests a strategy similar to one used by China to grab this opportunity by:

  1. Specialization at large scale in labour-intensive sectors, especially network products.
  2. Laser-like focus on enabling assembling operations at mammoth scale in network products.
  3. Export primarily to markets in rich countries.
  4. Trade policy must be an enabler.
Make in India: Challenges & Prospects

[op-ed snap] Why ‘Make in India’ has failedop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- 'Make in India' , its performance, and reasons for not delivering on the set goals.


Five years after its launch its appropriate time to take the stock of the progress made by ‘Make in India’.

Three major objectives of the initiative

  • First- Manufacturing growth rate at 12-14 %: The first objective is to increase the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy.
  • Second-100 million jobs: The second objective is to create 100 million additional manufacturing jobs in the economy by 2022.
  • Third-increase manufacturing’s contribution to GDP to 25%: The third objective is to ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (revised to 2025) from the current 16%.

Assessment of the progress made so far

  • As the policy changes were intended to usher growth in three key variables of the manufacturing sector — investments, output, and employment growth.
  • Progress on the investment front:
    • Slow growth: The last five years witnessed slow growth of investment in the economy.
    • This is more so when we consider capital investments in the manufacturing sector.
    • The decline in gross fixed capital formation: Gross fixed capital formation of the private sector declined to 28.6% of GDP in 2017-18 from 31.3% in 2013-14 (Economic Survey 2018-19).
    • Gross Fixed Capital Formation is the measure of aggregate investment.
    • Increase in private sector’s savings decrease in investment: Household savings have declined, while the private corporate sector’s savings have increased.
    • This is a scenario where the private sector’s savings have increased, but investments have decreased, despite policy measures to provide a good investment climate.
  • Progress on the output growth front:
    • Double-digit growth only in two quarters: The monthly index of industrial production (IIP) pertaining to manufacturing has registered double-digit growth rates only on two occasions during the period April 2012 to November 2019.
    • Below 3% for the most part: The data show that for a majority of the months, it was 3% or below and even negative for some months.
    • The negative growth implies a contraction of the sector.
  • Progress on the employment growth front:
    • No progress: The employment, especially industrial employment, has not grown to keep pace with the rate of new entries into the labour market.

Problems with the policy

  • The initiative had two major lacunae.
  • First- Too much reliance on foreign capital: The bulk of these schemes relied too much on foreign capital for investments and global markets for produce.
    • This created an inbuilt uncertainty, as domestic production had to be planned according to the demand and supply conditions elsewhere.
  • Second-Lack of implementation: The policy implementers need to take into account the implications of implementation deficit in their decisions.
    • The result of such a policy oversight is evident in a large number of stalled projects in India.
    • The spate of policy announcements without having the preparedness to implement them is ‘policy casualness’.
    • ‘Make in India’ has been plagued by a large number of under-prepared initiatives.

Three reasons why ‘Make in India’ failed to perform

  • Too-much ambitious goals: It set out too ambitious growth rates for the manufacturing sector to achieve.
    • Beyond capacity rate for the sector: An annual growth rate of 12-14% is well beyond the capacity of the industrial sector.
    • Overestimation of implementation capacity: To expect to build capabilities for such a quantum jump is perhaps an enormous overestimation of the implementation capacity of the government.
  • Dealing with too many sectors: The initiative brought in too many sectors into its fold.
    • Lack of policy focus: Bringing in too many sectors under its fold led to a loss of policy focus.
    • Lack of understanding of comparative advantages: Further, it was seen as a policy devoid of any understanding of the comparative advantages of the domestic economy.
  • Ill-timed launch
    • Given the uncertainties of the global economy and ever-rising trade protectionism, the initiative was spectacularly ill-timed.


  • In order to revive the ‘Make in India’ there is a need to make necessary changes in the policy and root out the causes associated with the policy implementation.







Make in India: Challenges & Prospects

[pib] Largest FDI project of Indian RailwaysPIB


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Make in India

  • Indian Railways has entered into Procurement cum Maintenance Agreement with Madhepura Electric Locomotive Pvt. Ltd. (MELPL), a joint venture of Indian Railways and M/s Alstom.

About the Project

  • Indian Railways and Alstom came together in 2015 to transform the heavy freight transportation landscape of the country.
  • A landmark agreement worth 3.5 billion Euro was signed to manufacture 800 electric locomotives for freight service and its associated maintenance.
  • This is the first time such High Horse Power locomotive is being tested on Broad Gauge network in the World by any Railways.
  • As part of the project, factory along with township has been set up in Madhepura, Bihar with  capacity to manufacture 120 locomotives per year.

Benefits of Project

  • Indian Railways have taken decision to have 12000 horse power twin Bo-Bo design Locomotive with 22.5 T (Tonnes) axle load upgradable to 25Tonnes with design speed of 120 kmph.
  • This locomotive will be game-changer for further movement of coal trains for Dedicated Freight Corridor.
  • With the success of this project it will boost the “Make in India” programme of the Government of India. This will further develop ancillary units for locomotive components.
  • The project will allow faster and safer movement of heavier freight trains.
  • It will haul 6000T trains at maximum speed of 100 kmph.
  • With 100% electrification, the new locomotive will not only bring down operational cost for Railways, the locomotive will also reduce the congestion faced by Indian Railways.
  • This will be used to haul heavier trains such as coal and iron ore.

Why makes it special?

  • More than 300 Engineers from India and France are working in Bangalore, Madhepura and France on the Project.
  • The project is expected to create more than 10,000 direct and indirect jobs in the country.
  • In two years time, more than 90% parts will be manufactured in India. This is a truly Make in India project.
Make in India: Challenges & Prospects

[op-ed snap] To make India the factory of the worldop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Prospects for India becoming global manufacturing hub


A golden opportunity

  • With the US-China trade war in its second year now, old business arrangements are under severe stress.
  • American companies that have long used Chinese factories to crank out low-cost products for various markets find themselves under US policy pressure to either pull out of China, or to shift key operations elsewhere.
  • US President Donald Trump might just raise tariffs on Chinese imports to 30% this October, enough to disrupt the cost calculations of the most resilient firms that make products in China.
  • This presents India an opportunity to plug a vacuum, and the government has moved in to seize it.

India’s footsteps

  • With new FDI norms, India would open the domestic field of contract manufacturing to 100% foreign ownership of ventures.
  • It is seen as a move explicitly designed to attract global players currently in search of low-cost locations for production units.
  • Coupled with the easing of local-sourcing conditions imposed on foreign single-brand retailers in India, the reform serves as a big welcome board to US firms.
  • It is one thing to issue an invitation, however, and quite another to win decisions in India’s favour.

Plugging loopholes

  • Our country does not have much of a reputation for manufacturing efficiency.
  • The sector has languished, as a proportion of the overall economic pie, even as services have leapt ahead.
  • While it is true that new investors could transform the way products are put together by bringing in practices perfected elsewhere, analysts have long expressed concerns about low productivity here.
  • Excessive red tape, which tends to raise corruption levels, has been another deterrent to foreign investment.
  • However the EODB in India has risen in recent years though, as measured by the World Bank, and inflows from overseas businesses have been rising apace.
  • In other words, the problems of the past need not persist in the future.

Replacing China

  • For India to try replacing China as the world’s factory, a prospect that holds out the dream of job generation by the million, the country would need to enhance its overall competitiveness as a manufacturer.
  • This is primarily about allowing companies to meet high quality standards at the lowest possible cost.
  • Broadly, the Chinese success formula so far has involved the large-scale use—and even diversion—of state resources to subsidize mass production, not to speak of labour conditions that some consider repressive.

Way Forward

  • In a democracy like ours, due caution should be exercised before attempting to emulate such ideas.
  • Even on keeping export price tags low, China is not a good role model.
  • Indeed, integration with global supply chains would require the Indian rupee’s value to be export-oriented, which could mean letting it slide when appropriate, but policymakers must resist currency manipulation.
  • India must make its market and democratic forces work in tandem as it sets about creating conditions that would spur efficiency and turn “Make in India” into a routine sight across the world.
Make in India: Challenges & Prospects

Defence manufacturing rules easedGovt. Schemes


Mains Paper 3: Economy | Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

From UPSC perspective, the following things are important:

Prelims level: Particulars of the SPG

Mains level: Indigenization of defence manufacturing


Opening up for Private Players

  1. The government issued a notification last week simplifying the process for approval of manufacturing of a range of defence and aerospace equipment and components by private industry.
  2. It is to be done by bringing them under the licensing authority of the Department of Industrial Policy and Promotion (DIPP).

Warships included

  1. Items are listed in three categories — defence aircraft, warships of all kinds, and allied items of defence equipment.
  2. The most significant aspect is that warships of all kinds, surface and sub-surface, have been included in the listing.
  3. The industrial licensing has been terminated for ‘parts and components of the equipment’ which would benefit the small and medium enterprises (SMEs).

Foreign manufacturers

  1. This move is also expected to help foreign Original Equipment Manufacturers (OEM) looking for partnerships with the private sector.
  2. The Defence Ministry has also formulated an ambitious Strategic Partnership (SP) model under the Defence Procurement Procedure (DPP).


Navigate to this page for more readings on SP Model in defence manufacturing:

Leg-up for private sector participation in defence equipment manufacturing

Make in India: Challenges & Prospects

Invest India wins UN award for excellence in promoting investments in sustainable developmentDOMR


Mains Paper 3: Indian Economy| Investment models

From UPSC perspective, the following things are important:

Prelims level: Make in India, Invest India, Particulars of the UN Award

Mains level: Evaluating the success of Make in India initiatives.


UN Award to Invest India

  1. Invest India, the country’s investment promotion body, has won the UN Award for excellence in promoting investments in sustainable development.
  2. The awards is organised by the United Nations Conference on Trade and Development (UNCTAD) at World Investment Forum, Geneva.
  3. It honours investment promotion agencies (IPAs) and their governments for their achievements and showcases best practices in attracting investment into SDG-related projects.

What’s the project all about?

  1. Invest India received the award for excellence in servicing and supporting a major global wind turbines company in the establishment of a blade manufacturing plant in India.
  2. The company committed to train local staff and produce 1 gigawatt of renewable energy.
  3. Implementation of the project is expected to reduce India’s wind energy cost significantly.


Invest India

  1. Invest India is the National Investment Promotion and Facilitation Agency of India and acts as the first point of reference for investors in India.
  2. It is set up as a nonprofit venture under the Department of Industrial Policy and Promotion, Ministry of Commerce and Industries, Government of India.
  3. Operationalized in early 2010, Invest India is set up as a joint venture company between the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry (35% equity), Federation of Indian Chambers of Commerce and Industry (FICCI) (51% equity), and State Governments of India (0.5% each).
  4. Thus, essentially, Invest India is a private company, unlike India Brand Equity Foundation – another investment promotion agency in India set up by the same Ministry – Ministry of Commerce & Industry.
  5. Invest India’s specialists provide multiple forms of support such as market entry strategies, deep dive industry analysis, partner search and location assessment, and policy advocacy with decision makers.
  6. Functions:
  • The core mandate of Invest India is investment promotion and facilitation.
  • It provides sector-specific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services.
  • Its mandate also includes assisting Indian investors to make informed choices about investment opportunities overseas.
  • Its experts, specializing across different countries, Indian states and sectors, handhold investors.
Make in India: Challenges & Prospects

[op-ed snap] A flawed defence procurement policyPriority 1


Mains Paper 3: Indian Economy| Investment models

From UPSC perspective, the following things are important:

Prelims level: Offset Partnership

Mains level: The newscard discusses flaws in India’s defence procurement policy , which is indirectly hampering Make in India policy and provides scope for crony capitalism to persist.


Row over Rafale

  1. The Defence Procurement Procedure, 2016, (DPP) recognizes the need to ensure that procurement is undertaken in a manner that takes India closer to the goal of developing a world-class domestic defence and aerospace industry.
  2. However, the offset requirements under the DPP are not helping it achieve this goal.
  3. The recent Rafale controversy is the symptom of a larger underlying problem in decision-making, transparency and consistency of public policy.

Offsets guidelines in the DPP

  1. Offsets are a portion of a contracted price with a foreign supplier that must be re-invested in the Indian defence sector, or against which the government can purchase technology.
  2. Some good intentions inform the DPP and its offsets regime, such as the need for public-private partnership, encouraging startups and direct investment, and flexibility for foreign suppliers.
  3. However, when it comes to the details, things look different.

Procurement Policy of India

  1. Under Indian law, government procurement is treated as distribution of endowments by the state and, hence, must be fair, transparent and equitable.
  2. There can be no favouritism or nepotism in the award of public contracts.

Biggest Policy Loophole

  1. Offsets are financed by Indian taxpayers, but the award of contracts by foreign suppliers is not subject to public procurement safeguards.
  2. The DPP even seems to indicate that the foreign supplier has complete discretion on choice of the Indian offset partner (IOP).
  3. This would permit the Indian government to avoid public procurement rules when taxpayer money is routed through a foreign supplier towards “offsets”.

An Open to Abuse Policy?

  1. Such a policy was the government’s argument during the Rafale controversy.
  2. It is openly falsehood for the government to require foreign suppliers to have IOPs and yet not have a say in the choice of offset partner or its investments.
  3. If this were true, the offset regime would be inherently open to abuse by the foreign supplier.

DPP norms for selecting Offset

  1. The DPP provides the government with extensive control over selection of the offset partner.
  2. For instance, it has the power to bar any entity from becoming an offset partner.
  3. The government also retains the power to evaluate offset proposals received in response to procurement tenders and conclude offset contracts.
  4. The DPP also provides that all offset proposals will be approved by the Union minister of defence, regardless of their value.
  5. During the period of the contract, any change in the Indian offset partner also requires government approval.

Are the offset guidelines satisfactory?

  1. From the above norms it is unlikely that the government has nothing to do with the selection of Indian offset partners. Neither would this be desirable.
  2. The intention is to create a free, open and competitive market, and yet at the same time, ensure that Indian taxpayers money not taken for a granted.

They are not, because:


  1. Defence procurement should be subject to transparent processes that ensure that Indian companies, big and small, compete on a level playing field.
  2. The selection of a large (and failing) conglomerate with no prior experience, as is the case with Rafale, would not have been possible if the government had directly procured under a sophisticated award process.
  3. If it is not possible or desirable under a direct procurement regime, it is difficult to argue that it is desirable under an offsets regime.


  1. While the procurement policy recognizes the need for domestic private partnership, it does not mandate a fair and diverse procurement process for offsets.
  2. Given the large contract values involved, this makes it likely that foreign suppliers will partner with just one or two large industrial groups to discharge their offset obligations.


  1. The definition of IOP is flawed. IOPs are defined as Indian enterprises engaged in making eligible products and/or services.
  2. If the objective is to build a domestic defence sector, the focus should instead be on direct investments.
  3. In other sectors where India has succeeded, foreign technology and know-how has followed investments, irrespective of ownership.

More Transparency is the need of Hour

  1. Indian ownership does not necessarily contribute to the growth of a sector, as much as investments within Indian shores.
  2. Focussing on investments will ensure that companies of all sizes, including foreign companies who wish to manufacture in India, are permitted to grow and flourish.
  3. For this, regulations that restrict foreign investments in the defence sector require a dose of reform.
  4. More importantly, transparency is essential in procurement contracts.

Way Forward

  1. In the interest of fairness, foreign suppliers should be free to invest in India, yet at the same time, offset investments/procurement must be subject to safeguards.
  2. Without substantive reforms in the DPP, there are likely to be more controversies and perceptions of crony capitalism.
  3. What is worse, the substantial amount of taxpayer’s money meant for the development of an indigenous defence sector might not find its way back.
Make in India: Challenges & Prospects

[pib] One District One ProductPIBPrelims Only


From UPSC perspective, the following things are important:

Prelims level: Particulars of the ODOP

Mains level: The newscard discusses the aspiring project of UP govt. which can be taken as a trial for implementing such project at a national level.


One District One Product (Ek Zila – Ek Utpadan) Scheme

  1. Under this scheme, UP govt. will provide Rs. 25000/- to local craftsmen and entrepreneurs in the upcoming 5 years.
  2. The primary objective of this scheme is to focus on a particular product and raise its quality to compete in the international market.
  3. This scheme is aimed to provide job opportunities to 25 lakh unemployed candidates across the state of UP.
  4. One District One Product Scheme will raise the GDP of the state up to 2 percent.
  5. Each district will be assigned a product under Ek Zila – Ek Utpadan Scheme.
  6. Ex: Kannauj- Perfume, Agra- Leather etc.
Make in India: Challenges & Prospects

[pib] Institute of Cost Accountants of IndiaPIBPrelims OnlyPriority 1


From UPSC perspective, the following things are important:

Prelims level:  ICAI

Mains level: Not Much


ICAI recently completed 70 years

Institute of Cost Accountants of India (ICAI)

  1. The Institute of Cost Accountants of India (ICAI), previously known as the Institute of Cost & Works Accountants of India (ICWAI), is a premier statutory professional accountancy body in India.
  2. It was established by Cost and Works Accountants Act 1959 as an autonomous professional Institute.
  3. Its objectives are promoting, regulating and developing the profession of Cost Accountancy.
  4. The headquarters of ICAI is situated in Kolkata, and operates through its four regional councils located at Kolkata, Chennai, Delhi and Mumbai, 94 chapters in India and 78 chapters abroad.

Function of ICAI

  1. It is the only licensing cum regulating body of Cost & Management Accountancy profession in India.
  2. It recommends the Cost Accounting Standards to be followed by companies in India to which statutory maintenance of cost records applicable.
  3. ICAI is solely responsible for setting the auditing and assurance standards for statutory Cost Audit to be followed in the Audit of Cost statements in India.
  4. It also issues other technical guidelines on several aspects like Internal Audit, Management Accounting etc. to be followed by practising Cost Accountants while discharging their services.
  5. It works closely with the industries, various departments of Government of India, State governments in India and other Regulating Authorities in India e.g. Reserve Bank of India, Insurance Regulatory and Development Authority, Securities and Exchange Board of India etc. on several aspects of performance, cost optimisation and reporting.

Role of ICAI

  1. As global manufacturing evolves and as manufacturing in India gets a boost over the coming decade – with the maturing of our Make in India programme – cost accountants will have a bigger and bigger role.
  2. It will be Cost accountants’ mandate to ensure that products and services are delivered at a competitive price but without compromising on quality.
Make in India: Challenges & Prospects

BARC develops cheaper, lightweight bulletproof jackets


Mains Paper 3: Science & Technology | Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology

From UPSC perspective, the following things are important:

Prelims level: Material used in the bullet proof jacket

Mains level: A great example of the ‘Make in India’ initiative in defence sector.


A next generation bullet proof jacket

  1. The Bhabha Atomic Reseach Centre (BARC) has developed a next-generation bulletproof jacket for the Indian armed forces
  2. It is not only cheaper but also much lighter
  3. Name of the jacket: Bhabha Kavach
  4. It is named after nuclear physicist Dr. Homi J. Bhabha
  5. The jacket was developed at BARC’s Trombay centre in response to a request from the CRPF and the Ministry of Home Affairs
  6. A five-member BARC team has worked for a year in 2015-16 to develop the jacket
  7. While the cost of a Bhabha Kavach is Rs. 70,000, jackets of similar strength are available in the range of Rs. 1.5 lakh and have to be imported

Testing is going on

  1. It is being tested by a joint team of the CRPF, Indo-Tibetan Border Police, and the Central Industrial Security Force
  2. The northern command of the Indian Army is also testing a variant of the jacket in Jammu and Kashmir

Material used

  1. The jacket is made using extremely hard boron carbide ceramics that is hot-pressed with carbon nano-tubes and composite polymer
  2. The superior performance of the light weight jacket derives from advanced ceramics and advanced nano-composite tubes indigenously developed at BARC
  3. BARC has been using boron carbide in the control rods of its nuclear reactors
Make in India: Challenges & Prospects

[op-ed snap] India in aerospace: Vision 2020op-ed snap


Mains Paper 3: Science & Technology | Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The newscard comprehensively deals with the issues related to Defence and Aerospace manufacturing sectors. The efforts done by the government can be seen as a part of its Make in India initiative.


Need to focus on aerospace and defence manufacturing sectors

  1. These sectors have potential to generate vast amounts of jobs and revenue
  2. India has one of the largest defence budgets in the world
  3. By 2018, it is expected to be in the vicinity of $56 billion
  4. In the commercial aviation sector, India remains one of the highest traffic growth markets
  5. It is estimated to become the third-largest aviation market in the world by 2025, and will likely need nearly 1,500 new commercial aircraft by 2030

Efforts done by the Government

  1. It has introduced the long-awaited strategic partnership model that will allow partnerships with overseas companies to manufacture everything from submarines to fighter jets in India
  2. It also opens the doors for Indian companies to form joint ventures with multinational original-equipment manufacturers (OEMs) for defence production
  3. This model has the potential to create a high-tech defence manufacturing ecosystem

Why is Manufacturing for the aerospace sector a complex exercise?

  1. The sector
    (1) is capital-intensive,
    (2) has high technological requirements and
    (3) has a prolonged gestation period
  2. Other challenges faced by the sector: costly raw materials, skilled labour, technological requirements, and the procurement of parts from multiple manufacturers

Three key challenges companies face in the aerospace and defence (A&D) sector

  1. Access to technology and talent
  2. building scale in a business that is extremely capital-intensive, and
  3. the enabling infrastructure and policy environment which can be clubbed together as what is known as the ease-of-doing-business basket

What can we learn from Automobile Sector?

  1. The automobile manufacturing sector benefited from having ancillary hubs around large car plants located in Gurugram, Chennai and Pune
  2. The government would do well to encourage the creation of A&D hubs too
  3. There is already some visible success on this front
  4. Telangana is home to the country’s first public aerospace and precision engineering special economic zone (SEZ)
  5. Karnataka too is setting up similar facilities

Contribution of foreign manufacturers

  1.  Boeing continues to expand its footprint in the country in the form of the Boeing India Engineering and Technology Center (BIETC)
  2. It is the Indian counterpart to its research and technology organization in the US

The way forward

  1. What is required in an ideal ecosystem is the setting up of facilities which cater to multiple stages of the supply chain, all in one location
  2. The target is to create an integrated aerospace ecosystem which enables customers to source all their requirements from one place to hasten the time-to-market
  3. Additionally, the industry needs a skilled talent pool for this highly specialized industry
  4. The creation of educational institutions and universities by the government that are tailor-made for the A&D sector, will go a long way in making India a preferred manufacturing destination
Make in India: Challenges & Prospects

Adani, SAAB tie up to build fighter jets


Mains Paper 3: Science & Technology | Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: A good example of ‘Make in India’ in the Defence Sector.


Collaboration with SAAB

  1. The Adani group has announced a collaboration with Swedish defence major SAAB to manufacture Gripen fighter jets in India, if selected
  2. However, the partnership would be possible if Adani being shortlisted in the evaluation process
  3. Why this collaboration: Indian Government is going to issue a multibillion dollar tender for over a 100 single engine fighter jets

Particulars of the Tender

  1. IAF is expected to begin the process in the next few months for a single engine fighter aircraft to replace the Russian Mig-21s and Mig-27s in service
  2. The procurement would be under the recently promulgated Strategic Partnership (SP) model of the Defence Procurement Procedure (DPP)
  3. The deal for 100 plus fighter aircraft is estimated to be worth over Rs. 60,000 crore
Make in India: Challenges & Prospects

Offset obligation: Reliance Defence, Thales to form JV


Mains Paper 3: Science and Technology | Science and Technology- developments and their applications and effects in everyday life; indigenization of technology and developing new technology

The newscard talks about a Joint Venture between India and France.

Following things are important from UPSC perspective:

Prelims Level: Know about the what, where and how of this Joint Venture

Mains Level: Make note of the advantages, and implications of JV Context


  1. French aerospace and defence technology major Thales and Reliance Defence announced their decision to set up a joint venture company in India
  2. It is to leverage and execute Thales’ $1-billion (Rs 6,500 crore) offset obligation against 36 Rafale combat aircraft being bought by India


  1. The JV will develop Indian capabilities to integrate and maintain radars and manufacture high-performance
    airborne electronics
  2. It will execute this offset from its proposed greenfield facility


  1. Within the proposed JV, Reliance Defence will have a 51% shareholding
  2. The remaining 49% will be held by Thales. Thales is a leading supplier of radars, electronic warfare solutions
    and software to Dassault Aviation that manufactures Rafale jets

What does the JV imply?

  1. The strategic partnership with global leader Thales will be a major milestone in the march towards best in the
    class manufacturing at support facilities for military hardware in India
  2. Moreover, it was Reliance’s commitment to the government’s ‘Make in India’ and ‘Skill India’ initiatives

Advantages of JV:

  1. The JV would develop skills and activity in the Special Economic Zone of Mihan-Nagpur
  2. It is together with an Indian supply chain for the manufacturing of microwave technologies and high
    performance airborne electronics
Make in India: Challenges & Prospects

Cabinet clears National Steel Policy that favours Indian steelmakers

  1. The cabinet cleared a national steel policy that favours domestic manufacturers in government projects
  2. All government tenders will give preference to domestically manufactured iron and steel products.
  3. There will be a condition in tender so that the surplus capacity is consumed
  4. Indian steel makers who import raw materials or intermediate products can claim the benefits of the
    domestic procurement provision if they add a minimum of 15% value to the product
  5. The policy has a waiver for specific kinds of steel not manufactured in the country, or where domestic makers
    can’t meet the quality standards required by a project
  6. The National Steel Policy 2017 aims to make India self-sufficient in steel production. It projects crude steel
    capacity of 300 million tonnes (mt), production of 255mt and per capita consumption of 158kg of finished steel by 2030-31, as against the current consumption of 61kg
  7. The policy also envisages adequate local manufacturing to meet the demand for high-grade automotive steel,
    electrical steel, special steels and alloys for strategic applications by the same year
Make in India: Challenges & Prospects

Govt. eyes 2 mn. jobs in mobile phone units

  • The government expects its ‘major new policy’ of phased manufacturing programme to create 2 million jobs and half a billion dollars worth of mobile manufacturing activity in the country over the next five to seven years.
  • The Centre will initiate fresh talks with Cupertino based Apple which will now have to calibrate its plans to manufacture its iconic iPhones in the country, in line with a new phased manufacturing programme for mobile phones notified on Friday.
  • A major scheme for infrastructure in electronics manufacturing clusters has been launched under which 8,000 acres of land will be developed across the country over the next three years.
  • The basic issue for mobile phones was that it became cheaper to import components as well as finished goods after India signed the World Trade Organisation’s ITA-1 pact (Information Technology Agreement), under which certain inputs for IT products were exempted from duties.
  • With the intention to substantially increase value addition within the country, the programme envisages
    promoting the sub-assembly of mechanics, microphone and receiver, keypad and USB cables in 2017-18; printed circuit boards, camera modules and connectors in 2018- 19; and display assembly, touch panels, vibrator motor and ringer in 2019-20.
Make in India: Challenges & Prospects

Niti Aayog for abolishing 2% duty on mobile phone circuits

  • Mobile phones could become cheaper if the government accepts a Niti Aayog proposal to drop the 2% import
    duty imposed on a critical component for handsets in the Union Budget for 2017-18.
  • The Budget had imposed a 2% special additional duty on imports of populated printed circuit boards (PCBs) used for mobile phones, as a measure to push the Make in India campaign.
  • The Aayog, in its draft three year action plan, has said the duty will hurt mobile phone makers in the country and the government must ensure that industries are not built behind ‘a wall of protection.’
  • Calling for a ‘low or no duty regime’ for key inputs of electronic products, the Aayog has said that the 2%
    customs duty on PCBs would provide modest protection to domestic manufacturers, but hurt the mobile phone
  • Though India has the potential to become a large electronics manufacturer and exporter due to its large
    labour force, a growing domestic market and proximity to other economies on the electronics value chain, the
    sector accounted for just 3% of India’s merchandise exports in 2015.
  • To increase India’s electronic manufacturing volumes and create jobs in the sector, we must address the high
    costs of inputs, reduce the administrative burden and provide appropriate incentives to producers.
  • The world market in electronics products is $2 trillion compared with only $65 billion in the domestic market.
    Therefore, an aggressive export strategy is essential to credibly prepare ourselves for the fourth Industrial
Make in India: Challenges & Prospects

Indian firm to partner Israel for anti-tank missiles

  1. News: Rafael of Israel and Kalyani group are setting up a joint venture (JV)
  2. Production of: Spike Anti-Tank Guided Missile (ATGM) which the Indian Army is in the process of procuring
  3. Tripartite Agreement: JV is to manufacture sub-assemblies and Bharat Dynamics Limited (BDL) will do electro optics and do hot integration at its Hyderabad facility
  4. FDI norms in defence: Kalyani group will hold 51 percent stake with Rafael holding the rest
  5. Deal: Rs.3,200 crore deal for the ATGMs was cleared in 2014 by the Defence Acquisition Council chaired by Defence Minister
  6. Includes 8,000 plus missiles, 300 plus launchers and requisite technology transfer to the Indian entity which was initially supposed to be BDL
Make in India: Challenges & Prospects

Mobile phones made in India almost double

  1. News: The number of mobile phones made in India in the current financial year doubled year-on-year to 11 crore
  2. Reason: The previous budget had rationalized the duty structure, which led to setting up of 16 new mobile units
  3. Budget: It has proposed 2% special additional duty on components like printed circuit boards and peripherals such as batteries and chargers
  4. Impact: It is likely to make phones and tablets made in India costlier
Make in India: Challenges & Prospects

Maharashtra bets big on ‘Make in India’ Week

Maharashtra and Mumbai are likely to be among the biggest beneficiaries of the Make in India Week, with the government going all out to make it a showpiece event.

  1. Maharashtra will host the biggest pavilion among the 17 State pavilions at the Make in India
  2. This event showcase potential as an investment destination over 10,000 sq ft, the State is likely to sign MoUs worth Rs. 4 lakh crore during the event
  3. The State will begin its pitch for investment on February 14 with the Maharashtra Textile seminar to attract investment in textile parks
  4. Though Maharashtra is one of the largest cotton producing States, only 25 per cent of its produce gets used here
  5. So in line with from-farm-to-fashion call given by the PM, this intend to scale it up to ensure that all the cotton gets utilised with direct benefit to farmers
Make in India: Challenges & Prospects

N-plant parts to be made in India

The localisation plans are part of the government’s Make in India initiative

  1. In a move that could become a model for countries keen for a share of India’s civil nuclear energy pie
  2. India and Russia have set up a working group to locally build components for nuclear power plants of Russian design
  3. This is based on the Action Program signed between Rosatom and the Department of Atomic Energy(DAE) of India
  4. India is looking to majorly ramp up nuclear power generation to overcome power shortages and reduce carbon emissions under its global commitments.
  5. The Action Program includes areas of cooperation in the field of joint machinery production for nuclear power plants
  6. The 3 joint working groups set up are –
  • The nuclear fuel cycle
  • Nuclear energy
  • Scientific-technical cooperation.
Make in India: Challenges & Prospects

‘Visa on arrival’ to attract Japan, Korea investors

This was being done keeping in mind the “Make in India” policy of the government and to make India an attractive destination for investors from the 2 countries.

  1. After PM Modi’s announcement that all Japanese citizens would get “visas on arrival”, the government has decided to extend it only to the business community for now.
  2. The government is actively considering including South Korea in this category.
  3. Japan and South Korea are already on the list of 113 countries whose citizens can arrive in India through an electronic tourist visa on arrival (e-TV) platform.
  4. Japan had earmarked a $11-12-billion fund for “Make in India”.
  5. At least 3 Japanese firms were given the go-ahead in 2015 to set up shop in India.
Make in India: Challenges & Prospects

Make-in-India initiative seen as growth driver for foundries

The Indian foundry industry expects $3 billion of investment in another 10 years to meet the potential demand of 30 MT of castings.

  1. Currently, the installed capacity is 15 MT and annual production is 10 MT.
  2. India is the 3rd largest producer of castings globally and almost 60% of the casting is consumed by automobile sector.
  3. There are indications of revival in the automobile sector and new opportunities in defence procurement.
  4. The Indian foundries have sought anti-dumping duty on some castings imported from China.
Make in India: Challenges & Prospects

The problem with Make in Indiaop-ed snap

  1. India’s natural comparative advantage lies in using its unskilled labour.
  2. But Indian manufacturing as well as services is skill-intensive, which leaves unskilled masses short of decent jobs.
  3. That automatically means there aren’t enough decent jobs for the unskilled masses
  4. Most new jobs have been in construction and that around 85% of the workforce is in the informal sector.

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