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Make in India gets big push as Modi government awards 56 defence licences to private companies

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‘AGNI-III’ missile, passes through the Rajpath during the 59th Republic Day Parade-2008, in New Delhi on January 26, 2008.

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By NewsGram Staff Writer

Underlining its determination to have indigenous defence production as a cornerstone of its ‘Make in India’ drive, the Narendra Modi government has awarded a record 56 defence manufacturing permits to private sector entities in the past year.

According to the data released by the Department of Industrial Policy and Promotion (DIPP), a slew of applications, some of which had been pending for more than four years, have been cleared since the BJP government came to power.

The permits are the first step in the process to enable firms such as Mahindra, Tata and Pipavav  to set up production units for major military equipment.

The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army while Mahindra has been given permits in a number of areas, including manufacturing naval systems like torpedoes, sea mines and boats.

Subsidiary companies like Mahindra Telephonics Integrated Systems and Tech Mahindra Ltd too have got defence permits.

The move stands as a major endorsement of the Indian private sector’s ability to operate in an arena that has until now been the preserve of foreign vendors and state-run entities.

Besides the established players, a number of new small firms are poised to enter the sector based on these clearances.

For example, Bullet Proof equipment manufacturer MKU will now be able to manufacture night vision devices while Bangalore-based Dynamatic Technologies has been granted a permit to manufacture Unmanned Aerial Vehicles.

Pipavav Defence and Offshore Engineering Company (PDOC), now being acquired by the Anil Ambani-run Reliance, has grabbed four permits to manufacture items ranging from medium tanks and howitzers to missiles, sensors and torpedoes.

In order to open up the defense sector, the government has started expediting clearances besides increasing the foreign investment limit for the defence sector to 49% and even up to 100% in select cases.

The process for application online and the validity of the Industrial license has been enhanced to seven years and speedy DIPP clearances are already being given for smaller items like components.

Complex matters such as the offset policy, blacklisting process as well as a specific route for the Make in India process are expected to be simplified through a new defence procurement policy, likely to be announced in the coming few weeks.

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Make in India Most Beneficial For Mobile Manufacturers

How mobile manufacturing made the most of 'Make in India'

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Mobile manufacturers
India is today the second-largest mobile phone manufacturer in the world after China. Pixabay

From just two mobile phone manufacturing units in 2014 to 268 mobile handset and accessories manufacturing units in 2019 which has led to 95 per cent of mobile phones sold in the country being produced domestically, the star in India’s “Make in India” story is indeed shining.

In fact, India is today the second-largest mobile phone manufacturer in the world after China. “India has achieved tremendous success in mobile phone and component manufacturing in the last four years with more than 95 per cent of domestic consumption now being produced in India,” Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA), told IANS.

“Our domestic market viz-a-viz domestic manufacturing is saturated and we have set our sights on a target of Rs 7.7 lakh crore of exports by 2025,” he added. According to a survey conducted by mobile industry body ICEA, the 268 mobile handset and accessories manufacturing units employ about 6.7 lakh people.

Mobile manufacturer
In India, 268 mobile handset and accessories manufacturing units employ about 6.7 lakh people. Pixabay

So today the phones that most Indians hold in their hands are made in India, thanks mainly to schemes such as Modified Special Incentive Package Scheme (M-SIPS) to provide financial incentives across the ESDM value chain to compensate for cost disability in manufacturing and Electronics Manufacturing Clusters (EMC).

Launched in 2012, the M-SIPS, provides capital subsidy of 25 per cent for electronics industry located in non-SEZ (Special Economic Zone) areas and 20 per cent for those in SEZ areas.

The Electronics Manufacturing Clusters (EMC) scheme, which was also launched in 2012, encouraged entities, including state governments, to provide good quality infrastructure within a cluster.

mobile manufacturer
Uttar Pradesh has emerged as the new hub of mobile manufacturing in the country over the past few years. Pixabay

Under the scheme, 50 per cent of the project cost for Greenfield Electronics Manufacturing Clusters and 75 per cent for Brownfield Electronics Manufacturing Clusters is given as grant. Due to the focus on “Make in India” and “Digital India” programmes, Uttar Pradesh has emerged as the new hub of mobile manufacturing in the country over the past few years.

In July 2018, Samsung launched the world’s largest mobile factory in Noida. The new facility was set up with the aim of doubling its capacity for mobile phones in Noida from 68 million units a year to 120 million units a year, in a phase-wise expansion to be completed by 2020.

Besides Samsung, most Chinese smartphone makers which now dominate the Indian market – Xiaomi, Oppo and Vivo — also produce their phones in the country. Apple has already started the assembling of iPhone 7 at its supplier Wistron’s facility in Bengaluru. Production of cellular mobile handsets in volume terms reached 225 million units in 2017-18, as compared to production of 60 million units in 2014-15.

Also Read: Why PM Modi Acted Now on Kashmir?

The National Policy on Electronics 2019 has set the aim of promoting domestic manufacturing and export in the entire value-chain of ESDM (Electronics System Design and Manufacturing) for economic development to achieve a turnover of Rs 26 lakh crore by 2025. This will include targeted production of one billion mobile handsets by 2025, valued at Rs 13 lakh crore, including 600 million mobile handsets valued at Rs 7 lakh crore for export.

India currently has over 450 million smartphone users. The number of smartphone users in the country is expected to reach 859 million by 2022, according to an ASSOCHAM-PwC joint study. (IANS)