From iPhones To Semiconductors: A Decade On, How Far Has The 'Make In India' Journey Come?

The 'Make in India' initiative was launched in 2014 to turn the nation's focus towards manufacturing and tap into global value chains. On 25 September, the mission completed 10 years.

Recent years have been marked by the establishment of manufacturing facilities in various sectors — defence, electronic components, railway and aviation infrastructure, and the crucial chip manufacturing.

Phone assembly plants — especially for iPhones — have grown rapidly, with Foxconn and India’s Tata Group playing a key role in this expansion.

Most recently, we learnt about Foxconn's potential investment of around $1 billion towards setting up a smartphone display module assembly plant in Tamil Nadu to serve Apple’s production needs for the iPhone.

Meanwhile, India's semiconductor ecosystem has consistently made headlines with new developments.

During the Prime Minister's recent visit to the United States (US), both nations agreed to establish a joint semiconductor fabrication plant. This facility will produce chips for national security, next-generation telecommunications, and green energy applications.

PLI Role In 'Make in India'

Despite scepticism about the long-term sustainability of the Make in India initiative, data shows significant progress over the years.

Foreign direct investment (FDI) in the manufacturing sector rose by 76 per cent, from $12.09 billion in FY 2020-21 to $21.34 billion in FY 2021-22.

As of November 2023, PLI initiatives created 6.78 lakh jobs. Women in the electronics sector emerged as the major beneficiaries.

The production-linked incentive (PLI) scheme, introduced in 2020, has been a major driving force behind Make in India.

With a budget of Rs 1.97 lakh crore allocated across 14 key sectors, the scheme has transformed India's manufacturing landscape, enabling the country to become more self-reliant in critical segments like mobile phones, medical devices, and pharmaceuticals.

In FY 2022–23, PLI-supported sectors contributed over Rs 2.56 lakh crore in exports, strengthening India's position in global manufacturing. By November 2023, the PLI schemes had produced goods worth Rs 8.6 lakh crore and contributed Rs 3.2 lakh crore to exports.

Growth Across Sectors

In 2014, manufacturing accounted for a tiny share of India's gross domestic product (GDP). But recent advances suggest that India is on the path to becoming a manufacturing and export hub.

In electronics, exports have surged nearly fourfold compared to a decade ago.

Meanwhile, after the launch of the initiative, mobile imports have declined by around 85 per cent. In 2014-15, the imports were Rs 48,609 crore, falling to Rs 7,665 crore in 2023-24.

India's defence sector has expanded with an aim to cut back on imports, with defence exports growing 21-fold over the decade to Rs 88,319 crore.

India's automotive sector, particularly electric vehicles (EVs), has witnessed substantial growth, again driven by PLI incentives.

Similarly, India's railways, once heavily dependent on imported coaches, have advanced in domestic manufacturing. The shift has been particularly evident in the production of rolling stock for the country's semi-high-speed rail network and metro transit systems across various cities.

The Road Ahead

Manufacturing currently contributes around 17 per cent to India's GDP.

Commerce Minister Piyush Goyal emphasised the goal of increasing this share to 25 per cent by 2047, requiring the sector to grow at 1.5 times the rate of overall economic growth.

While the gains are not yet widespread across all sectors, there are clear indicators of growth.

According to a MoneyControl report, India's Purchasing Managers' Index (PMI) for manufacturing has consistently remained above the long-term average.

In FY24, manufacturing growth held steady at 7 per cent, contributing to an overall economic growth rate of 6.7 per cent.

"The culture of promoting manufacturing in India is now well-established," Goyal said, adding that when Make in India was launched, there was no 'China plus one' strategy or anti-China sentiment driving it.

"Our ambition is for every electronic device to have a 'Make in India' component," he said.

Over the 10 years leading up to FY24, FDI inflows have more than doubled, reaching $667 billion. And this is despite significant global challenges like wars and the Covid-19 pandemic.