In his address to the nation on the occasion of India's 74th Independence Day, Prime Minister Modi provided strategic clarity on his vision for a self-reliant India; it is the need of the hour for the nation to increase its contribution to the global economy, he said.
One of the most important aspects of Indian Prime Minister Narendra Modi's Independence Day address to the nation was his emphasis on Make for the World. This marks a nuanced clarification of his previous calls for creating an Atmanirbhar Bharat (Self-Reliant India) on the back of his government's flagship Make in India initiative.
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When Modi first unveiled his vision for an Atmanirbhar Bharat he said the five pillars of India′s self-reliance are economy, infrastructure, system, demography and demand. The idea was to make India an integral part of global supply chains by rewiring the fundamentals of the economy by following a decentralised model of growth.
But many influential quarters and important influencers of public opinion focused more on the “Be vocal about local” message of the Prime Minister.
That is why Modi's clarion call to Make for the World will resonate with industry and investors across the world. It provides fresh strategic clarity on what exactly the government means by self-reliance. The Prime Minister was quite emphatic that his government wasn't shutting the doors to the world. Instead, it involved a radical alteration of the terms of trade to make India an integral part of the global value chain.
“Today, the world is interconnected and interdependent. So, it is the need of the hour that a vast country like India should increase its contribution to the world economy,” he told the nation from the ramparts of the historic 17th century Red Fort. To do that, India will have to be self-reliant.
Modi's speech wasn't just rhetoric; there's strong evidence that the government's policies to integrate India into the global supply chain is working on the ground. Already, leading mobile phone brands Apple and Samsung are moving up to 50 per cent of their manufacturing /assembly operations to India from countries like China and Vietnam. What's more, many of their supply chain partners, which supply important component and sub-assembles have also applied to the government for incentives under its new Production Linked Incentive (PLI) scheme to shift part of their operations to India.
Once this happens, Indian value addition in mobile phones will rise from 15-20 per cent at present to double this figure by 2025. The country is, thus, on the verge of achieving its ambition of becoming the hub of exports for smartphones worth $200 billion and more.
The government is now attempting to replicate its success in creating a globally competitive smartphone manufacturing eco-system in products like air-conditioners, televisions, furniture, footwear and eight other sectors.
To achieve the Prime Minister's vision, Indian companies also have to own the intellectual property rights that go into these products. For that, the country has to step up research both in companies as well as in higher education institutions.
India will become Atmanirbhar only when it achieves mastery and ownership of the entire chain from conception to design and development to manufacture of the finished product. But well begun is half done. And that gives analysts reason for optimism.