Make in India – A fresh approach: the latest developments
By Vijesh Zinzuwadia, Zinzuwadia & Co. CA
Make in India is an initiative launched by the Government of India to encourage multinational, as well as national companies to manufacture their products in India. It was launched by Prime Minister Narendra Modi on 25 September 2014. The idea is for India to emerge, after initiation of the programme in 2016, as the top global destination for foreign direct investment, surpassing the USA and China. India received USD 63 billion in FDI in 2015.
If you are interested in expanding your business into India, this might represent a very attractive option.
“Make in India” campaign objective
The campaign’s ultimate objective is to make India a renowned manufacturing hub for key sectors. Companies across the globe would be invited to invest, set up factories and expand their facilities in India and use India’s highly talented and skilled workforce to create world-class zero-defect products. The ultimate mission is to manufacture in India and sell the products worldwide.
Key steps to making “Make in India” successful
- Doing business in India just got easier – new de-licensing and deregulation measures are reducing complexity and significantly increasing speed and transparency.
- Process of applying for Industrial License & Industrial Entrepreneur Memorandum available online via eBiz portal on 24/7 basis.
- Validity of Industrial License extended to three years.
- States asked to introduce self-certification and third party certification under Boilers Act.
- Major components of defence products list excluded from industrial licensing.
- Deregulation of dual-use items with military/civilian applications.
- Services of all central government departments & ministries will be integrated within eBiz – a single-window IT platform for services.
- Process of obtaining environmental clearances to be carried out online.
- Following advisories sent to all departments/state governments to simplify and rationalise the regulatory environment:
– All returns should be filed online through a unified form.
– A checklist of required compliances should be placed on the web portal of the relevant ministry or department.
– All registers required to be maintained by the business should be replaced with a single electronic register.
– No inspection should be undertaken without the approval of the Department Head.
– For all no-risk, non-hazardous businesses, a system of self-certification to be introduced.
Industrial response to “Make in India”
- The government received INR 1.20 lakh crore (USD 18 billion) worth of proposals from companies interested in manufacturing electronics in India.
- The Spice Group said it would start a mobile phone manufacturing unit with an investment of INR 5 billion (USD 74 million).
- 10 “MSME-Samsung Technical Schools” will be established in India.
- Huawei opened a new research and development (R&D) campus and invested USD 170 million.
- France-based LH Aviation signed an MoU (Memorandum of Understanding) with OIS Advanced Technologies to set up a drone manufacturing plant.
- Foxconn announced that it would invest USD 5 billion over the course of five years to set up R&D and hi-tech semiconductor manufacturing facilities.
- Boeing could assemble fighter planes and either the Apache or Chinook defence helicopters in India. Manufacture of the F/A-18 Super Hornet will be in India if the Indian Air Force (IAF) were to purchase it.
- Alstom and GE Transport will invest INR 400 billion (USD 5.9 billion) to set up locomotive manufacturing factories.
- Japan will set up a USD 12 billion fund for Make in India-related projects called the “Japan-India Make in India Special Finance Facility”.
- Kamov Ka-226 multi-purpose helicopter is to be built in India.
- Lockheed Martin stated that it was “ready to manufacture” F-16 aircraft in India.
Automotive, automobile components, aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery, electronic systems, food processing, IT and BPM, leather, media and entertainment, mining, oil and gas, pharmaceuticals, ports and shipping, railways, renewable energy, roads and highways, space, textiles and garments, thermal power, tourism and hospitality, wellness.
About Startup India
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. Through this initiative, the Government aims to empower startups to grow through innovation and design. In order to meet the objectives of the initiative, the government is announcing this Action Plan that addresses all aspects of the startup ecosystem, simplification and handholding.
Definition: Startup means an entity, incorporated or registered in India for no longer than five years, with annual turnover not exceeding INR 25 crore (approximately USD 3.6 million) in any preceding financial year, working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.
Benefits of “Startup India”
- Compliance regime based on selfcertification.
- Create a single point of contact for the entire startup ecosystem and enable knowledge exchange and access to funding.
- Mobile App and Portal.
- Legal support and fast-tracking of patent examination at lower costs.
- Relaxed norms for public procurement for startups.
- Faster exit for startups.
- Funding support through a “fund of funds” with a corpus of INR 10,000 crore (approx. USD 1,470.58 million).
- Credit guarantee fund for startups.
- Tax exemption on capital gains.
- Tax exemption for startups for a period of three years.
- Tax exemption on investments above fair market value.
- Startup festivals in order to showcase innovation and providing a platform for collaboration.
Vijesh ZinzuwadiaZinzuwadia & Co. CA, Ahmedabad, Kalol, Rajkot, Vadodara, India
Published: May 2016 l Photo: Colourbox.de - Alexey