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A woman walks in front of an advertisement for Samsung smartphones in Mumbai, India, on January 27, 2017.
A woman walks past an advertisement for Samsung smartphones in Mumbai, India, on January 27, 2017. [19659008] Photo: Bloomberg Photo by Dhiraj Singh.
Despite a sleek marketing campaign, the world is not yet ready to "make it to India".
Narendra Modi and South Korean President Moon Jae-in celebrated the inauguration of what Samsung Electronics has named the world's largest mobile phone factory. At this sensational event just outside New Delhi, Modi said the facility was "extremely important" for his Make in India initiative to increase industrial production by 25% from here. 2020 and create millions of jobs. Samsung said the factory was a "shining example" of the success of the program.
But the investment is more exception than the norm. Data from the World Bank and the Reserve Bank of India show that the manufacturing industry has not seen any significant increase since Modi took office in 2014.
While the Indian economy has overtaken France to become the sixth-largest gross domestic product by a peak of 18.6 percent in 1995, according to the World Bank. Other data show that new investments in India have fallen and projects are losing steam.
"The announcement of Samsung is good news, but it should be considered punctual at the present time," says Vivek Dehejia, associate professor. the economy at Carleton University in Ottawa. "Manufacturing in India is a noble aspiration of the Modi government but, in the absence of infrastructure support and ease of doing business, it is a difficult challenge."
The initiative is a valid attempt to attract global companies, analysts However, it has not been accompanied by significant changes to revive production or change what is essentially a service-oriented economy .
Spokespersons for the Prime Minister and the Ministry of Commerce did not respond to requests for comment. Unlike Beijing's Made in China 2025 program, which targets strategic industries, from robotics to new energy vehicles, to investment and state subsidies, Modi's Make in India plan is more an investment promotion strategy.
As part of the initiative launched in 2014, there were easing restrictions on foreign investment in several sectors, including defense.
However, private data show that investment is decreasing. The Monitoring Center of the Indian economy shows that new projects have fallen to 6.62 billion rupees ($ 96.6 billion) during the fiscal year ended 18.7 trillion rupees in 2015.
The value of blocked projects rose from 5.29 trillion rupees during this period. Even the data from the Reserve Bank of India's newsletter shows that capital spending by corporations has declined since Modi came to power.
Modi's Make in India project did not work, partly because Indian companies Mahesh Vyas, CMIE's director general
"Now we have to wait for these capabilities to be fully absorbed before new capabilities are built aggressively, "Vyas said. He added that "the world has become much more protectionist and is more eager to keep employment on its shores than to export to other countries."
These capabilities have done little to temper the growth of imports of goods manufactured abroad. Rising purchases of smartphones and televisions have made electronics the second most important product imported after oil and has widened the country's trade deficit.
Under Modi, record foreign direct investments were made in India and the facility improved. Most investments, such as Amazon.com Inc.'s $ 5 billion commitment to expand its operations in India, have gone to the country's leading service and technology industries.
FDI accounts for only 1.2% of the total investment in India Abhishek Gupta. The high-level investments of foreign companies "should not be confused with an overall improvement in investment activity in India," he said.
With more jobs created in the service sector, the Modi program should focus on investments. 19659011] "The creation of jobs in India could tremendously benefit if the goal of Make in India is expanded to include more services, compared to its excessive emphasis on manufacturing," Gupta said. "India's tough labor laws and bureaucratic barriers to entry into the manufacturing sector, as well as its mastery of English – an asset in global services – suggest that its comparative advantage lies in the services. "
Even the mascot of the program Make in India – a lion made up of gears – has not escaped the expensive regulations and occasional political interferences that are still common in India and a major obstacle to investment.
A large lion statue, built by one of the Indian public companies to promote the manufacturing program, allegedly broke the rules when it was placed outside the Department of Industrial Policy and Promotion in New Delhi. And a separate branding exercise involving colorful lion structures in Mumbai has led to charges of violating local heritage regulations.
"The share of the manufacturing sector in GDP continues to stagnate in India as in other major economies."
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