Factors Responsible for Location of Industry

Make in India launched in 2014 aims to transform India into a global manufacturing hub by attracting foreign investment, promoting local production and creating jobs, focusing on sectors like aerospace, automotive, electronics and pharmaceuticals.

Significance on Foreign Investments – 

1. Attracts $284 billion FDI between 2014-2019, surging 45% annually, across sectors like aerospace, automotive, electronics.
2. Simplifies regulations, streamlines processes and cuts red tape, improving India’s Ease of Doing Business ranking.
3. Attracts sector specific investments in aerospace, automotive, electronics, pharmaceuticals and renewables with 25% growth in FDI.

Significance on Local Manufacturing –

1. Contributes 22% to India’s GDP, generating $500 billion manufacturing output up from $160 billion in 2014.
2. Creates 4.5 million new jobs between 2014-2019 with 12% annual growth in manufacturing employment.
3. Enhances India’s global competitiveness, boosting exports by 15% and ranking 63rd in World Bank’s GCI.
4. Promotes self reliance, reducing import dependence by 15% and increasing domestic production to 35% of GDP.

Challenges to Make in India include infrastructure gaps, regulatory hurdles and skill deficits. Initiatives to promote it include Invest India, Startup India and Skill India along with sector specific policies, simplified tax regimes and eased FDI norms to boost manufacturing and attract investments.

Industrial growth and urbanization in Indian cities are interdependent and have a symbiotic relationship.Industrial growth fuels Indian urbanization, driving migration, economic growth and infrastructure development in cities nationwide.

1. Fuels job creation by attracting rural migrants and driving urbanization with 10 million plus jobs created annually contributing to 30% plus urban population growth transforming cities like Bengaluru, Hyderabad.
2. Triggers infrastructure development including roads, transportation, housing, utilities and amenities with investments exceeding $1 trillion transforming urban landscapes in cities like Mumbai, Delhi and Ahmedabad.
3. Stimulates economic growth by boosting urban GDP by 20-30%, increasing per capita income and contributing 60-70% to national GDP as seen in cities like Bengaluru, Pune and Hyderabad.
4. Fosters diversification by spawning services sectors like IT, finance, logistics and tourism, accounting for 50-60% of urban GDP and transforming cities like Chennai, Kolkata and Gurugram.

Industrial growth and urbanization in Indian cities pose challenges including environmental degradation, infrastructure strain, housing shortages, traffic congestion, social inequality and health concerns, affecting quality of life and sustainability in cities like Mumbai, Delhi and Bengaluru.

India’s pharmaceutical industry is a global leader exporting high quality, affordable medicines to 200 plus countries with a strong network of manufacturers, researchers and innovators driving healthcare accessibility worldwide.The Indian pharmaceuticals industry faces several challenges in a global context, including –

1. Regulatory challenges globally, including US FDA and EU compliance, Good Manufacturing Practices (GMP), Intellectual Property Rights (IPR) issues and varying country-specific regulations.
2. Market related challenges globally, including intense competition, price controls, reimbursement issues, changing market dynamics, patent expirations and fluctuating demand for generics and biosimilars.
3. Operational challenges globally, including supply chain disruptions, quality control issues, manufacturing capacity constraints, logistics hurdles, talent retention and adopting new technologies and digital transformation.
4. Financial challenges globally, including high R&D costs, pricing pressure, thin profit margins, currency fluctuations, funding constraints and increasing regulatory compliance expenses and litigation fees.
5. Technological challenges globally, including adopting digitalization, AI, blockchain and IoT, upgrading manufacturing technologies, ensuring data integrity and cybersecurity and implementing paperless and analytics driven systems.
6. Global trade challenges including trade tensions, protectionism, tariff barriers, non tariff barriers, regulatory hurdles, currency fluctuations and compliance with Free Trade Agreements (FTAs) and WTO norms.

The Indian government initiatives to overcome challenges include “Pharma Vision 2020”, “Make in India”, PLI (Production Linked Incentive) scheme, relaxation in FDI norms and programs under Department of Pharmaceuticals (DoP).