Will 'Atmanirbhar Bharat' Outshine the Glitter Of 'Global Brands'? Preference for local manufacturing of products especially in categories such as retail and consumer electronics is taking precedence over international brands
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Prime Minister Narendra Modi's call to "find opportunity in times of crisis' by "going local for vocal' or "atmanirbhar' has certainly set the nation on a growth mindset. While the pandemic is continuing to pose unprecedented challenges that are glaring at the face of world economies, India continues to stay on the path of recovery and realignment. One such thrust has come upon the Indian manufacturing, which is pushing the country to take a place on world map as a manufacturing hub. The Indian government aims to create 100 million new jobs in the sector by 2022 (according to ibef.org).
At the heart of atmanirbharta is also the drive for indigenisation of manufacturing, supporting not only the vast domestic demand but also attracting manufacturing firms to the large consumer base that the country offers.
In particular, India has identified key industry clusters where the country has been performing well, including hardware and electronics and rolled out incentives schemes like the PLI (production-linked incentives) to support the re-shoring of large-scale electronics manufacturing to India. This follows the earlier implementation of the 100 per cent FDI in contract manufacturing and the National Electronics Policy, 2019. Indeed, from complete assembly to component manufacturing we are witnessing a shift towards India as being considered a key part of global supply chain realignment.
Although the markets are still recouping and businesses looking for opportunities to sustain or maintain momentum, things are far from where they were pre-COVID.
However, preference for local manufacturing of products especially in categories such as retail and consumer electronics is taking precedence over international brands. Businesses are looking to establish themselves locally and connect through nearest ports instead of moving the supply chain to foreign territories.
So what will sail the global brands through these tides of change and uncertainty?
One major factor which will create the pull or affinity, back towards globally licensed brands is the "nostalgia'; irrespective of whether the shopping happens online or offline. The other thing which will play in favour of world brands will be how soon and competently they will ally with the Indian licensees and reap results of the great Indian manufacturing eco-system. In this case, Indian consumer will stand to gain twofold. One by adding back to the Indian economy by consuming "Make in India' products and thereby living up to the sentiment . Secondly, by consuming world-class quality brands at competitive prices.
In the end, I would like to conclude by saying that the manufacturing sector of India has the potential to reach $1 trillion by 2025. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of $2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors. India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, amongst others, have set up or are looking to establish their manufacturing bases in the country.
With impetus on developing industrial corridors and smart cities, the government is aiming and ensuring holistic development. These corridors will further assist in integrating, monitoring and developing a conducive environment for the industrial development and will promote advance practices in manufacturing.
So, it's high time, that we use all that is favourable to our benefit and push pedals to make India the hotspot of manufacturing by realizing and facilitating all that is required of us—better labour laws, simplified tax laws and incentivizing local manufacturers, et al.