Make in India: Assembly or Manufacturing?

Make in India: Assembly or Manufacturing? The initiative was launched to build India as a global manufacturing hub. However, much of the growth so far has been in assembly operations, where imported parts are put together in India. True manufacturing requires local production of components, strong supply chains, and innovation-driven industries.

For Make in India to succeed fully, India must shift focus from assembly-heavy growth to advanced manufacturing that creates jobs, boosts exports, and builds long-term self-reliance.

What Does ‘Make in India’ Mean by Assembly versus Genuine Manufacturing?

The Make in India campaign promotes domestic production, but not all companies investing in India are setting up end-to-end manufacturing plants. Many are only conducting assembly operations.

• Assembly refers to the process of combining imported components (such as mobile phone parts, semiconductors, or automotive parts) to create a finished product. It does not build deep local capacity.
• Genuine manufacturing, on the other hand, involves design, component production, raw material processing, and large-scale fabrication within India.

How Does ‘Make in India’ Distinguish Between Assembly Operations and Local Manufacturing Efforts?

The Indian government differentiates the two based on value addition percentage and domestic sourcing requirements.

• If a company imports 80-90% of parts and only assembles them in India, it is assembly-based Make in India.
• If a company invests in local suppliers, raw material processing, and indigenous design, then it counts as true manufacturing under Make in India.

Regulatory measures such as local content requirements, FDI rules, and customs duties are applied to push businesses towards actual manufacturing.

Why is it Important to Clarify if ‘Make in India’ Involves Assembly or True Manufacturing?

It is important to clarify if “make in India” involves assembly or true manufacturing because:

• Policy success evaluation: If Make in India is only assembly, then its impact on long-term industrial growth is limited.
• Job creation: Assembly generates fewer jobs compared to manufacturing.
• Technology transfer: Real manufacturing brings innovation and R&D, while assembly does not.
• Economic independence: Without true manufacturing, India remains dependent on imports.

Hence, defining the difference between assembly and manufacturing in Make in India is necessary to measure real progress.

What are Economic Implications When ‘Make in India’ Projects are Primarily Assembly Instead of Manufacturing?

If Make in India projects remain assembly-focused, the economic benefits are restricted:

• High import bills: India continues to rely heavily on imported components.
• Low value addition: Domestic GDP contribution remains small.
• Fewer skill opportunities: India misses the chance to build a skilled workforce.
• Global dependency: Strategic sectors like electronics and defense remain import-driven.

On the other hand, true manufacturing under Make in India:

• Strengthens domestic supply chains
• Increases exports
• Boosts employment
• Reduces trade deficit

How has the ‘Make in India’ Initiative Impacted India’s Reliance on Imported Components & Local Production?

While Make in India has increased assembly-based production, especially in electronics and automobiles, India is still dependent on imports for key components.

• Mobile phones: India assembles most phones locally, but chips, displays, and batteries are largely imported.
• Automobiles: Final assembly is done in India, but high-end parts like semiconductors and advanced engines are imported.

Thus, Make in India has reduced some reliance on imports but has not yet achieved full-scale indigenous manufacturing.

What Examples Exist Where ‘Make in India’ has Resulted in Only Assembly Rather than Manufacturing?

• Smartphones: Most global companies like Apple and Xiaomi assemble in India but import critical parts.
• Electronics: Laptops and televisions are largely assembled with imported panels and chips.
• Defense: Fighter jets and submarines are assembled locally but rely on foreign technology.

These examples show that while assembly under Make in India has boosted production numbers, genuine manufacturing is still lagging.

How Does Local Component Manufacturing Strengthen the Authenticity of ‘Make in India’ Manufacturing?

Local component manufacturing ensures that Make in India products are genuinely Indian.

• It reduces import dependence.
• It increases local supplier growth.
• It generates employment across multiple sectors (raw material, machining, logistics).
• It ensures sustainable industrial growth.

For example: if India starts producing semiconductors locally, the entire electronics sector under Make in India will become stronger and more authentic.

How Does the PLI Scheme Boost Make in India Manufacturing?

The PLI scheme boosts Make in India manufacturing by rewarding companies for local value addition, attracting foreign investment, and pushing industries like electronics, pharma, and automobiles from assembly to genuine manufacturing. For example, in mobile phones, PLI has reduced dependence on imports by encouraging local sourcing of components.

What Steps can Strengthen Make in India from Assembly to Advanced Manufacturing?

Here are the steps advanced manufacturing india can strengthen Make in India by:

• Building strong local component industries (electronics, semiconductors, auto parts).
• Investing more in R&D to create innovation-led manufacturing.
• Offering long-term tax and financial benefits to genuine manufacturers.
• Training the workforce with advanced skills and technology know-how.
• Improving infrastructure such as power, logistics, and supply chains.
• Strictly monitoring value addition to ensure Make in India reflects true manufacturing.

By taking these steps, Make in India can move beyond assembly and position itself as a global manufacturing leader.