So far, GoI's flagship 'Make in India' initiative has had a mixed record. While manufacturing's share of the economy has been falling further from its target of 25% of GDP, the programme has still had great success in boosting exports, attracting FDI into manufacturing and enhancing the ease of doing business. However, Make in India's own production-linked incentives (PLIs) are offset by persistent tariff barriers. The programme has also not lived up to its promise to increase employment - particularly among India's most educated workers, whose unemployment rate is nearly double that of their high school-educated counterparts at 19.1%.
Make in India can be made better by shifting focus to employment in more labour-intensive industries, increasing India's global trade competitiveness and by GoI fully embracing an ancillary 'Innovate in India' campaign focused on facilitating India's rise as a global R&D hub and generating employment for high-skill workers.
Global companies are already hungry to develop R&D capacity in India. GE Healthcare just opened its first 5G innovation lab in Bengaluru last month. Medtronic, manufacturer of life-saving ventilators delivered to India during the Delta wave, opened the first surgical robotics centre in the Asia-Pacific in Gurgaon last year. Global food company Cargill and medical device manufacturer Stryker opened new R&D facilities in the city this year as well. Walmart Global Technology has entered into a research partnership with IIT Madras, and will conduct R&D in the IIT Madras Research Park, along with pharma giant Pfizer NSE -0.23 %. Medtech leader Boston Scientific recently opened its second R&D centre in Pune.
In addition to dozens of major research and innovation centres, the number of global capability centres (GCCs), which provide supportive R&D and IT functions, employ over 1 million people and are set to grow to over 1,900 by 2025. Of these GCCs, some 65% belong to US companies.
This intense interest by global industry is despite persisting disincentives to expand capacity into India - an underdeveloped intellectual property rights (IPR) regime, schemes that discriminate against foreign firms and uncertainty around data protection. Which only serves to illustrate the more foundational strengths that make India a prime candidate for R&D investment. GoI can fully realise India's R&D potential by making a concerted effort to address these disincentives. Data regulations should avoid imposing restrictions on data flows that impede service quality and innovation.
Read more at: https://economictimes.indiatimes.com/opinion/et-commentary/innovation-in-focus-how-india-can-become-a-global-rd-powerhouse/articleshow/93529140.cms