us-trade-report-flags-challenges-from-make-in-india-policy

Context: The U.S. Trade Representative (USTR) report terms India’s policies “trade-restrictive” and saying the “Make in India” campaign epitomises the challenges to the trade relationship.

Key points:

  • Trade-restrictive policies: India is emphasizing on import substitution through a “Make in India” campaign. It is a challenge to the US-India bilateral trade relationship.
  • India’s significance for the USA: India’s large market, economic growth, and development make it an essential market for many U.S. exporters.
  • USA revocation of India’s preferential trading status under the Generalised System of Preferences (GSP) program was mentioned.
  • In a country-wise section on Digital Service Tax (DST), a Section 301 investigation on India’s DST, is highlighted. 
  • Mini trade deal package negotiations: 
    • U.S. objectives in this negotiation included resolution of various non-tariff barriers, targeted reduction of certain Indian tariffs, and other market access improvements. 
    • The United States also engaged with India on the full range of pressing bilateral trade issues, including intellectual property (IP) protection and enforcement, policy development affecting electronic commerce and digital trade, and market access for agricultural and non-agricultural goods and services.
    • These issues remain unresolved.

Make in India

In 2014, the Indian government launched the 'Make in India Initiative' in order to give thrust to the manufacturing sector's growth rate to 12-14 per cent per annum.

What is Make in India (Beginning of Indigenous Manufacturing):

  • ‘Make in India’ is a major national initiative that focuses on making India a global manufacturing hub. 
  • It is being led by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry.
  • The policy approach was to create a conducive environment for investments, develop modern and efficient infrastructure, and open up new sectors for foreign capital.

The three major objectives were: 

  • To increase the manufacturing sector’s growth rate to 12-14% per annum in order to increase the sector’s share in the economy; 
  • To create 100 million additional manufacturing jobs in the economy by 2022
  • To ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (revised to 2025) from the current 16%. 

Key Thrust of the Programme:  Key thrust of the programme is oriented on Cutting down in delays in manufacturing projects clearance and also develop adequate infrastructure to make it easier for companies to do business in India. 

Key Sectors under the Programme: The focus of Make in India programme is on 25 sectors. These include automobiles, aviation, chemicals, IT & BPM, pharmaceuticals, construction, defence manufacturing, etc.

Source: https://www.thehindu.com/business/Industry/us-trade-report-flags-challenges-from-make-in-india-policy/article33966691.ece