No matter what anyone says, Make in India is not a sham

Make in India is not a sham. It's an extraordinary step towards changing India from a services nation to a product one. But it is not what people think it is - yet.

Manufacturing works on the principle of value addition, i.e. How much incremental value do you add in each step to reach the final product. Let's say you want to "manufacture" a small board game. What are the "core elements" of it? First is the design, of course. Then there are the hardware components, like the board, dices, maybe some cards, props, literature collateral, and so on. And then there's final packaging.

After the design, maybe you make the entire selection of hardware components in house. Maybe you don't. Maybe you choose to make the board yourself, but there's a vendor who's really good at making the literature booklets of great quality at a very good price. Maybe there's a vendor in China who's unbeatable when it comes to supplying Dice, and so you decide it's a good idea to get it from him.

The question is this: If you chose to (or had to) import the Dice from China, would your Make in India project be a "sham"? Of course, not. Your product is still Made in India, but it's just that its value addition as a percentage is not 100%. Maybe after finding success in your Board Game venture, you decide to incubate a vendor who'll make a special kind of "Wooden Dices" for you. At that moment, your value addition will theoretically increase to 100%, which is great. But your earlier efforts still remain valid.

Make in India is a step towards increasing percentage value addition to reach the final product stage. Like in smartphones, the current value addition stands at 23%. The goal is to take it to 38% by 2032 (or 2035), at which point, it'll be parallel to China's. Since China's value addition in the smartphone industry is 40%, does it mean "Made in China" is a sham? Of course, not. Even China imports a lot of core compenents from other places, like the minerals required to make batteries and so on. But yes, their value addition is higher than anyone else. And that's why China rules the world.

India is only beginning. We firstly had to set up places where we could just "open the boxes and screw them back", i.e. bringing CKD (Completely knocked down) parts, and put them together. Because even that was a big task. We considered just repackaging as "value addition", because it truly was.

That grew up to a point where we've begun making "some" parts as well. Almost every day, we're setting up a new factory somewhere, which is adding some value to our contribution in manufacturing. All that's no joke. In 2017, we used to spend over $3 Billion imports with almost zero exports. In 2020, we became a net exporter. Now we're raking in over $24 Billion in smartphone exports, with some new components being cornered every week, which is what ECMS is for.

Indian manufacturing is in embryonic stages, sure. But Make in India is definitely not a sham. Let's be very clear on that.

Make in India, marching ahead.

P.S. You just read an honest (and hopefully valuable) article for free. If you like reading my writings, consider making donations. Amounts don't matter, gestures do. Here's a big cheers to all my Patrons!

Read more articles here.