The Indian government has spearheaded several initiatives to boost local manufacturing, improve the ease of doing business, and enhance the country’s global trade position. Programs like Make-in-India and the National Single-Window System (NSWS) were designed to encourage domestic businesses to participate more actively in economic growth and policy shaping. However, there are concerns about the level of industry participation in these efforts.
Industry Involvement in Government Committees
One key area where domestic businesses could have a more significant impact is in policy-making committees. Committees like the Steering Committee on Advancing Local Value-add and Exports (SCALE) are responsible for shaping important schemes, such as the Production-Linked Incentive (PLI) program, which aims to boost local manufacturing. However, despite the potential benefits, the involvement of key business bodies like CII (Confederation of Indian Industry), FICCI (Federation of Indian Chambers of Commerce & Industry), and Assocham has been notably lacking. This suggests a need for stronger engagement from the private sector.
Ease of Doing Business - Reducing Compliance Burden
The government has been actively working to reduce the compliance burden on businesses to improve the Ease of Doing Business in India. Initiatives like the National Single-Window System (NSWS) were launched to streamline business approvals and clearances. Yet, the response from businesses to these efforts has been tepid, with minimal input provided on how to improve regulatory procedures.
Reducing unnecessary bureaucracy is crucial for improving business operations, and greater industry feedback could help make the NSWS and similar schemes more effective.
Impact on Foreign Trade Agreements (FTAs)
Another area where the domestic industry’s stance has significant implications is in Foreign Trade Agreements (FTAs). Tax concessions on exports are a critical factor in securing favorable FTAs with key trading partners like the United Kingdom and the European Union. However, there has been resistance from domestic manufacturers toward these concessions, which could hinder India’s ability to strike beneficial trade deals. This resistance may ultimately hurt local manufacturers by limiting their access to global markets, where reduced tariffs could make Indian goods more competitive.
Industry Needs to Step Up
While the Indian government has rolled out multiple policies to support domestic manufacturing and improve the business environment, the success of these initiatives depends on the active participation of the domestic industry. There is a clear need for businesses to engage more deeply in shaping and refining these policies to ensure they achieve their full potential in boosting India's economic growth.
The claim that the domestic industry is fully supporting government initiatives is partially true. While some engagement exists, more proactive involvement is needed to maximize the effectiveness of initiatives like Make-in-India and Ease of Doing Business.
