Monday, October 27, 2014

Fate of the Make in India program?

Recently, the Modi Government launched the ambitious ‘Make in India program’, where investors from the world over were requested to include India in their manufacturing plans and to invest extensively here. The aim is to convert India into a manufacturing hub for the world, very similar to China, as we offered the largest bunch of young, trained and motivated workforce's in the world. Intricately planned and amazingly thought through, details of Sectors that are desirable, the ‘Smart Cities’ that are being developed into such hubs and also the ‘Industrial Corridors’ that would work in unison have all been identified, but has any focus been put on one aspect – The Ease of doing business in India?

It is quite embarrassing that as a nation, we seem to unfailingly go after all our big FDI investors with a hunting crop! Tax notices have been served in the past on Vodafone, Nokia and BMW. Is this perhaps because our rules are so opaque, and our bureaucrats love to keep things shrouded in mystery and adhocism so that, suddenly, one fine day, they have the opportunity to use their Discretionary Powers to suddenly re-interpret the rules? Why is it not possible to publish a clear document recording all the Rules, Legal and Financial compliance's at the time of granting of the License? Will it not avoid this silly season of litigation and arbitration with Governments pulling in their ‘Sovereign’ punches – as Finland was forced to do some months ago?

Now, sadly, Nokia has announced that it will shut its Chennai facility on the 1st of November, as it couldn't be transferred to the purchaser, Microsoft on account of pending Tax Claims by both the State and Central Governments. This move has put some 6,600 people out of work (directly) and adversely affected some 10,000 others indirectly. What will happen to Vodafone and BMW, next? With this kind of business climate and officialdom, the Make in India campaign is doomed to failure, unless the License-Permit Raj run by the bureaucracy is eliminated.

Just a couple of days after posting this article, I learn with dismay that the World Bank has demoted India a further 8 places to be 142 out of 189 (please see Economic Times link), for the period June 2013 to May 2014, which is the last year of the UPA Government. Thus, it is amply clear that all efforts of the UPA Government, if anything, did nothing to improve the business climate in India, leaving this unenviable task to the NDA Government that is now in power. The World Bank was thankfully quite candid in mentioning that this dismal performance cannot be a reflection on the performance of the new political dispensation which had been in power for a few days at the time of this evaluation.

I do hope that this will be a wakeup call to the NDA Government and they will configure all their policies in such a manner that India reaches to within the top 25 countries in year one, and higher as the years go by. For any foreign investor, who has 141 options better placed than India, it is not conceivable that he will overlook all 141 options and pick India to invest in. We have got to change the way we do business. 

Update as on 24th November 2014.

Since I wrote this article, I am thrilled to note that the Government of India in a surprising exhibition of alacrity, adopted the World Bank Report Ease of doing Business as a guidance tool, and has promised that they will configure the policies in such a manner as to be in full consonance with the requirements of Ease of doing Business and has even promised that they will try their best to ensure that India figures within the top 50 in a years' time.

Needless to say, this a sea change for an Indian Government and the openness, the speed of response and the appropriateness of the response is most heartening. 

The Make in India team have also since become quite active on Facebook and Twitter (@makeinindia) and have been collaring many followers, who, one would imagine, would encourage, motivate and guide the policy with their comments, including me.

More recently, a report titled Country Brands Index came out, something that I was personally not aware of, wherein they analyse a country's strengths in various criteria - economic, environmental and social and rate a country on how it is perceived by the rest of the world. Hence, a country that is high in the perception index, enjoys a high degree of reliability perception and hence people would be less hesitant to buy a product manufactured there. Thus, countries themselves become brands! 

I was amazed that just when India embarks on a Make in India program, a report, upon aligning with which, would ensure the success of the Make in India program, came to my notice, and I have introduced the same to the Make in India team. I do hope they will recognize the benefits and work toward a high CBI rating in 2015 and make us all proud. 

If India rates within 25 on the #EaseofdoingBusiness and within Top 20 on the #CBI2015, there will be nothing that can stop the flow of investment to us.


  1. Was I wrong in assuming the Indian economy is immune to the global mortgage crisis, failures of banks in the West and liquidity crisis?

    1. Thanks for writing in Paul. While I'm no expert on India's economic model and it's interdependencies with the global systems (I'm basically interested in social commentary of the situation), I dare say that India is at a stage where her economics are becoming increasingly interlinked with the world's major economies, her protectionist past, and her vast size of local influences do manage to keep her partially protected. Partially, because a collapsing Bank in Japan or the Mortgage crisis in the US may create a flutter, but the cost of oil crossing $110 can create a mini crisis.

      Hope to get some views on the topic of discussion, ie the ease of doing business in India.

  2. I'm thrilled to mention here that a Tweet by me requesting the Make in India team to study the Country Brands Index 2014 Report was picked up by Simon Anholt who was involved in the creation of the CBI Report, after which the Global Marketing Manager of Future Brand contacted me and was kind enough to share the link of the report with me. Reproducing the mail exchange:

    From: Hemanth Sharma
    Sent: Monday, November 24, 2014 5:23 PM
    To: 'Moore-Evans, Damien (WW-FUB)'
    Subject: RE: Thanks for the CBI 2014-15 Report

    Dear Damien,

    I’m afraid do not have any direct involvement with the Make in India project, I’m only playing a role of an activist and hoping to influence some of the decision making. I’m trying to provide some Social Media support and by writing about the initiative. I attach the link to my article.

    The contact for the Make in India initiative ( that is available in the public domain is as follows:

    Invest India, Federation House, Tansen Marg
    New Delhi-110001, India
    Telephone No: +91-11-2348 7411

    I do hope you will be able to establish contact and convince the MiI team to align their policies to the CBI as this will ensure that they give due importance to the soft aspects of the national brand instead of just a hard-nosed economic agenda. Would be much obliged and thankful.

    Thanks and regards,

    Hemanth Sharma

    From: Moore-Evans, Damien (WW-FUB)
    Sent: Monday, November 24, 2014 2:58 PM
    To: Hemanth Sharma
    Subject: Re: Thanks for the CBI 2014-15 Report

    Dear Hemanth,

    Thanks for getting in touch and we're glad you like the report.

    Do you happen to have any contact details for the Make In India team and what is your involvement in this project?

    Kind regards,

    From: Hemanth Sharma
    Date: Saturday, 22 November 2014 10:26
    To: Damien Moore-Evans
    Subject: Thanks for the CBI 2014-15 Report

    Dear Mr. Evans,

    At the outset, permit me to thank your team for sending me the link to download the above report in response to a Tweet of mine. I congratulate you on an excellent report based on robust and measurable criteria, where Culture and Soft Issues are given the required weightage instead of only hard economics. Do keep up the good work.

    As you may have gathered, I’m writing from India, where our Hon PM Mr. Narendra Modi has introduced an initiative to encourage investment and manufacturing in India called “Make in India”, and his team has been closely monitoring India’s performance as captured in the World Bank report Ease of Doing Business. It was in this connection that I wrote to them suggesting that they also align themselves with the CBI Report, where India has performed pretty poorly. We have seen a refreshing level of openness and approach-ability from the Modi Government, and I’m sure they will soon see merit in that suggestion.

    If you have any outreach program where you contact potential nations and introduce your ratings program to them, I request you to kindly consider contacting Mr. Modi or his Make in India team and do so. I am very hopeful that India, which is on a new developmental path, would welcome any program that helps us define our near term goals and milestones and the CBI would be aggressively aligned with.

    Thanks and regards,

    Hemanth Sharma


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