Make in India- The Road leading to a New India

The Make in India campaighn is perhaps PM Modi’s government’s biggest establishment. The campaign encourages Indian businesses to continue to research, manufacture, and assemble products in India by providing financial incentives to foreign and domestic investors. The purpose is to create jobs, encourage use of Indian products, enhance working skills etc.

Tue Apr 05 2022 | Business Law | Comments (0)


Rise and Shine is the new flag that the Prime Minister of India, Shri. Narendra Modi, has started waving across the nation with his new and significant Make in India Campaign. Unlike the previously launched campaigns, this one seems to have garnered  steam because of the way it has been announced to everyone. Specifically, the website and the logo of the campaign is a strong message to the masses. Inspired from the Asoka Chakra, the Make in India website displays a lion figure with a  graphic of mechanism in the backdrop. The mascot of the campaign echoes strength, power, magnanimity, confidence and stability. A person surfing on this website is certain to notice a touch of professionalism and branding which may have been missing in  old government campaigns.The word of the campaign is so popular  that its presence on  social media networking websites has received an overwhelming response. Whether it is Twitter or Facebook, the campaign has been getting rave reviews for the promises it holds for investors.

Brief Background

The Make in India campaign was officially announced by the Prime Minister of India on 25th September 2014. More people have been addressing it as a movement rather than  a campaign simply because it seems to be a highly  committed   idea. The  campaign  drive is expected to have a huge impact on global recognition of the national economy, creation of job opportunities in India and on the process of transforming India  into a self-reliant or self-sufficient nation. The icing on the cake  is how it attempts to reduce the pressure 'of strict rules, stringent guidelines and the existing bureaucracy that  investors normally  face.

In order to make  foreign companies  invest in India, the government has come with a structure to ensure speedy approvals of projects by a single online portals formed for this purpose to save on time, a formation of an eight member designated team or group for responding to investor inquiries with a stipulated time limit of 48 hours, and talking about major topics such as labor laws, skill development, and infrastructure development

Sectors covered under the  Make in India Campaign

The twenty- five sectors chiefly covered in this drive include the following:

Incentives under  Make in India

In  this highly publicised Campaign, there is something in store for every prospective foreign investor. In the automobile division, the duty on small cars & motorcycles, commercial vehicles and large cars has been reduced from 12% to 8%, 30% to 24% and 27% to 24%, respectively. Investors, who decide to divest their funds into automobile components, can benefit from subsidized land cost, power tariff incentives, investment subsidies and the backward areas subsidies.  If  aircraft engines or its ancillary parts are  sent for repair services, they can be exempted from duty. Investors, who plan to deal into biotechnology, can get 150% weighted tax deduction for carrying out research and development. The Government is also offering assistance by reducing the basic custom duty on chemicals. Distinctively, the duty on reformate and crude glycerin has been slashed from 10% to 2.5% and 12.5% to 7.5% respectively. Exemption from Central Sales Tax, Service Tax, Customs Duty and Income Tax will be offered to those interested in the development of Special Economic Zones (SEZ). Special incentives, such as assistance of 75% of the project expenditure (not more than INR 0.5 billion) for developing the Brownfield Electronic Manufacturing Clusters, have also been included in the new drive of  Make in India.

The Government of India has made a provision of INR 250 billion for the defense sector. For the same segment, the capital outlay has been increased by a whopping amount of INR 50 billion. A weighted tax deduction of 200% will be given to all those who make investments for carrying out scientific research in the division of electric machinery. State level incentives of relaxation on stamp duty, concessional rate of interest on loans and other tax benefits will be offered for developing the railways and the thermal power sectors. The basic custom duty on televisions, colour picture tubes, and ebook readers has been brought down to NIL. For certain specified inputs such as PVC of electronic systems, investors can seek full exemption from Special Additional Duty (SAD). According to the Union Budget, a provision of INR 500 million has been kept aside for the production of indigenous cattle breeds. An equal amount of provision has also been made towards the establishment of a blue revolution in the inland fisheries. The establishment of cold chain facilities and beekeeping business attracts 100% and 150% deductions on income tax, respectively. A special provision of INR 5 billion has been reserved for introducing a pan-India programme, which is Digital India, as well as for the national rural technology mission. The leather based sector has been completely de-licensed with simultaneous involvement of state-of-the-art machinery. An assistance of 30% is also offered on the cost of plant at micro level, and that of 20% for other units under the Indian Leather Development Programme (ILDP) scheme.

As a benefit for developing the community radio stations, the Government of India has declared a provision of INR 1000 million. The basic custom duty on ships bought for breaking up, coal-tar pitch, battery waste and steel grade limestone has been reduced to half. For boosting the oil & gas sector, the Government has introduced a cut in the excise duty of petrol from INR 7.5 per litre to INR 2.35 per litre. Investors who are keen to launch 4 institutions of the same stature as AIIMS in West Bengal, Andhra Pradesh, Maharashtra and Uttar Pradesh can get access to a support of about INR 5000 million. A separate budget of INR 116.35 billion has been maintained for developing the Outer Harbor Project at Tuticorin. As far as renewable energy is concerned, the Government is ready to finance up to INR 5 billion for solar power projects at Rajasthan, Tamil Nadu, Ladakh and Gujarat. A general provision of INR 378.8 billion has been retained for projects under the National Highway Authority of India (NHAI). An allocation of about INR 3300 million has been made for encouraging the textile and  garments division, especially in the regions of Varanasi, Surat, Tamil Nadu, Delhi and Jammu & Kashmir. Close to INR 11 billion has been set aside for developing the public, archeological and religious tourist attractions. A central sector scheme has been initialized for encouraging international cooperation to establish AYUSH, which is  a wellness scheme.

While this is just the glimpse of what lies ahead, foreign investors are sure to enjoy a smooth ride through the government SOPs  of  the Make in India Campaign, while divesting their funds in the Indian  economy.

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