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Make in India, a new initiative designed to encourage the flow of Foreign Direct Investment (FDI) was launched September 25th officially by Narendra Modi, Prime Minister of India in his country as well as by over 50 Indian embassies and consulates worldwide.
The Make in India initiative is aimed at providing a reference point for guiding foreign investors on all aspects of regulatory and policy issues and to assist them in obtaining regulatory clearances. The Indian government is working on the regulatory processes to make them simple and reduce the burden on investors.
The initiative was promoted by the Indian Embassy in Addis Ababa on Thursday September 25th at the Hilton Hotel by the Indian Ambassador to Ethiopia and Djibouti Sanjay Verma. The Ambassador stated that, the Make in India initiative is driven by the fact that India wants to increase the share of manufacturing in the country’s GDP.
“India wants to increase the share of manufacturing in its GDP, one because it will create jobs and two because we have the capability and capacity to become a world manufacturing power in a variety of sectors. We have already identified 25 sectors and it is for us to recognize we have this potential and advertize to the world that there is good value to coming to India and producing because you will get a world class environment and will produce world class products,” Verma stated.
Referring to the Indian Prime Minister’s speech during the Make in India initiative launch, Ambassador Verma stated that although it is an Indian initiative, it can also apply to others.
“Our Prime Minister, although he is addressing Indians in his Make in India unveiling speech, it is important to listen to what he said because it can also be an African voice or it can be an Ethiopian voice because it talks about basic issues; it talks about governance, how to move the economy forward, how to change old habits and aspirations of saying enough is enough, we all need a better life,” Verma said.
The Ambassador stated that, Ethiopia and India are similar in many respects such as having a young population and a dominating agricultural sector.
“You have a large population that is dependent on agriculture which is the primary sector, but because of the desire of the youth to move forward from rural to urban areas, you will have to create jobs in the manufacturing sector. I think currently you have over 17 million children in high school. Where will they get jobs? Because the service sector cannot provide that many number of jobs,” Verma told Capital.
He also pointed out that since the service sector cannot take in the entire young work force that is produced each year, there is no option but to focus on the manufacturing sector.
“You identify sectors which are your strength, for example Ethiopia has the textile, leather, and food processing. Similarly, India has identified 25 sectors where we feel we have natural and comparative advantages. We have the social, cultural and economical background and we can compete. The fact that we just sent a satellite to Mars at less cost than it took to produce the movie Gravity means we have certain strengths that we will be utilizing,” Verma further said.
It was stated that there are many opportunities through the Make in India initiative that entrepreneurs can take advantage of.
“I was very aware of the fact that right now the India trade and economic relationship is skewed. Trade is overwhelmingly in India’s favor. But this only means that trade has to be balanced, more Ethiopian entrepreneurs need to come to India to figure out what they will be able to export. For example, edible oil is something that can be exported to India, pulses and coffee to some extent or even leather and textile products,” said Verma.
One of the goals of launching the Make in India initiative in Ethiopia, According to the Ambassador, was to rekindle the interest of Ethiopian entrepreneurs. He said that, although now it is not possible, maybe in the next 4-5 years, there might be an out going FDI from Ethiopia to India.
“We have to remember that India is a developing country. We have people below the poverty line; we have health, education and sanitation issues. It is not that we are the most developed country in the world. I think all countries have to compete; investments are available because it is more and more difficult to produce in the West. There is a capital surplus in the West but diminishing manufacturing opportunities, so that money has to go somewhere. It could go to India, it could go to China or elsewhere. Countries need to keep themselves attractive and have an ease of doing business,” Verma said.
FDI to India has been around USD 25 to 30 billion per year for the last couple of years. This number is expected to reach USD 50 billion in the next year or so.
On Wednesday September 24th, India successfully placed a satellite into Mars’ orbit. The Mars Orbiter Mission covered 680 million kilometers in 300-days and the mission took four years starting from the feasibility study.
“The Mars story is a fantastic story. India has been successful at its first attempt and has launched a satellite to Mars. It was the cheapest and most economical space project that has ever been launched,” said Verma.
He also stated that the project utilized indigenous technology and was knowledge based and referred to it as frugal engineering which is a way of reducing the complexity and cost of a good and its production.
He added that, October 2, which is the birthday of Mahatama Gndhi, will be dedicated to cleaning cities in India.
“Cleaning a city or a country is also an economic activity because one, it increases GDP, two, it will bring healthcare cost and three, it creates employment. From the broom to Mars, economics is something that India is focused on,” Verma said in conclusion.