India’s Industrial Policy has evolved over the years, and relevant changes have been introduced based on the exigencies of time.
At the time of independence, development was to be led by the public sector, to create a sound industrial base for the future.
The Industrial Policy 1991 was in response to a challenge, and appropriate changes were introduced to facilitate the transition from a state-regulated economy to a liberalised and globalised economy.
Overtime, the thinking that started dominating policy circles was that the government, instead of directly intervening in sectors, must play the role of a facilitator to ensure competition and efficiency.
The National Manufacturing Policy was released by the Government in 2011. The main objectives of the Policy were increasing the manufacturing sector growth to 12-14 percent over the medium term, increasing the share of manufacturing in GDP to 25 percent by 2022, creating 100 million additional jobs in the manufacturing sector by 2022 and increasing domestic value addition and technological depth in manufacturing.
Industry should be encouraged to drive formulation and development of voluntary standards, by using industry driven standards setting bodies, if needed.
Regular participation of identified experts in international standards setting bodies such as International Organization for Standardization (ISO), International Electrotechnical Commission (IEC) and Codex.
Enhancing testing, inspection and certification infrastructure domestically, with private-sector participation.
Ease of doing business (EoDB) is another key area which requires reform.
There should be an institutional mechanism for regulatory impact assessment, which will provide an objective evaluation of new regulations.
Technological advancement of industry in India has not kept pace with that of many other manufacturing nations. There is a strong need to encourage Indian industry to upgrade to advanced technologies and ease transfer of technology from global and Indian innovators to Indian industry.
India’s share in global value chains (GVCs) is low vis-a-vis other comparable economies. The above measures encompassing infrastructure development leading to supply chain resilience, PMP and PLI schemes in a number of products, promoting Make in India and the sustained drive towards quality and boosting domestic capacity will pave the way for India to make its mark in GVCs in the times to come.