Using the ‘Make in India’ Strategy as an Opportunity Amid Covid-19

Sweta Basu
August 09, 2020


The Make in India strategy was launched by the Narendra Modi government on 25 September 2014 to increase the growth rate of the manufacturing sector in India by urging companies to produce goods domestically with dedicated investments. However, one is equally aware of the global economic slowdown in India owing to the increasing trade sanctions and tariff barriers by the USA on the one hand and rising complexities with China on the other, which is emerging as a global trade hegemon exporting deflation and captivating the markets of India at large.

India’s economic slowdown was quite visible in the early stages of the pandemic, which seems to be getting better in the current quarter. Amidst the COVID-19 pandemic, the Indian economy was hit by contraction, as did most of the world’s economies. This was reflected by rising unemployment and fewer investments coupled with a dip in the household income. This precarious situation, however, seems to be bettering with growth picking up and a planned way to attract foreign investors and a long term plan to replace supply chain concentration in China 

Against this backdrop, it is interesting to note that India is exporting food items and other resources which are domestically manufactured, especially essential drugs to nations worldwide like the hydroxychloroquine drugs. India is the largest producer of hydroxychloroquine drugs and has supplied the same for the treatment of COVID-19 by exporting 50 million hydroxychloroquine tablets to the USA to deal with the coronavirus pandemic. Even a large number of ventilators and PPEs (Personal Protective Equipment) are being made and circulated to meet the demands to treat coronavirus patients. This has even registered huge demands overseas and is being exported widely.

This initiative has subsequently boosted India’s economic bilateral ties, especially with the USA. As on receiving medical aid, USA has shown indications to conclude a limited trade deal with India and collaborate through joint ventures along economic lines through India’s textile sector as Memorandums of Understanding (MoUs) between Indo American Chamber of Commerce (IACC) and states of North and South Carolina have been signed further employing Indian investors into the American textiles sector.

Given the prevailing Coronavirus pandemic, we are aware of how the big powers of the globe are completely engulfed in a battle to become virus-free. India is equally dealing with the challenges in combatting COVID-19. Despite this, India showed their selfless generosity, and the Union Agricultural Ministry schemed out ways for solving problems both internally as well as across borders with the help of the farm export promotion body called Agricultural and Processed Food Products Export Development Authority (APEDA). Around 50,000 tons of wheat has been exported to Afghanistan and around 40,000 tons of grains to Lebanon. The Trade Promotion Council of India at this juncture indicated that India could tap into the continuous surge in demand for food products across global markets. Since India is a massive exporter of rice, meat, tea, honey, and other organic commodities, this in a way will serve two purpose – one to promote the Atmanirbhar Bharat scheme of a self-reliant Indian economy encouraging local produce at a substantial price by substituting the imports from other countries especially China and second, by promoting the Make in India manufacturing.

After the pharmaceutical industries recorded massive manufacturing of hydroxychloroquine, the Indian industry is eyeing further to manufacture pesticides. Following backward integration, India, which relies on China for importing insecticides and pesticides, is now focusing on utilizing the Make in India vision to manufacture their chemicals like herbicides or fungicides domestically, aiming to speed up once the pandemic recedes.

The Indian government has recently banned around 59 Chinese mobile applications on the grounds of its violation of Indian sovereignty and integrity. This has further enabled the Indian smartphone market, which embarked on fulfilling Indian demands in 2014-15, has now expanded their bases not only domestically but also globally as India has surpassed the USA by becoming the second-largest smartphone market. To aggravate electronics manufacturing, the Ministry of Electronics and Information Technology has also planned for new schemes of RS 48,000 crore to promote electronics manufacturing and export that will again serve as an alternative to Chinese products by augmenting the domestic as well as the international business enterprises for India.

Despite challenges concerning the flaws in structural reforms like the Indian labor laws, disputed land regulations, and lack of cooperative mechanisms between employers and employees, there are multiple opportunities too, especially as the COVID situation has enabled India to strengthen and proliferate its economic base and look beyond the domestic market to boost manufacturing and production by further generating employment. 

The disrupted supply chains in China, owing to its delay in identifying the pandemic and trade disputes with Washington, have alerted the global economic corporations that are now finding alternatives for manufacture and investment. Here the renewed prospects of the Make in India scheme can make way and capitalize remunerative advantages through commercial diplomacy of social dialogue, fiscal incentives for the localized manufacturing units to motivate bulk production, and rigorous inspection on free trade agreements with precise policies to avoid a hassle in trade practices. Therefore India being a hub for labor and skill intensive manufacturing, can reap profits through the Make in India strategy and lay the foundation of a sturdy base for economical manufacturing and production in the post COVID scenario.

*** The author is currently pursuing Masters in International Relations from Pondicherry Central University and currently a research intern at the Observer Research Foundation ***