Prime Minister Narendra Modi’s clarion call to ‘Make in India’ seems to have got an enthusiastic response from India Inc.
Call it timing: In less than a month of Modi launching the campaign, a slew of big-ticket investments in manufacturing have been announced, mostly in Modi’s home state of Gujarat.
In fact, a number of plants were inaugurated recently, and a few others are in the pipeline, it is learnt.
For instance, American drug maker Abbott commissioned its first greenfield factory in Jhagadia (Gujarat) to make in India nutritional products, which the company was importing from Singapore and Europe so far. The plant entails an investment of Rs 450 crore and employs over 400 people.
“We love the prime minister’s ‘Make in India’ concept and we want to participate in the campaign. It is an opportunity for us to be closer to our customer,” said John Landgraf, executive vice-president, Abbott’s global nutrition.
German major BASF inaugurated its chemical manufacturing plant in Dahej with an investment of Rs 1,000 crore, representing the company’s single largest investment in India.
Both the plants, of Abbott and BASF respectively, were inaugurated in this month by Gujarat Chief Minister Anandiben Patel.
While most such investments were in the pipeline, and are being prepared for launch, the execution of the plan has been extra-ordinarily fast in some cases. Take for example the Honda Motorcycle and Scooter India (HMSI) project.
Though the first buzz about the country’s largest two-wheeler maker taking an interest in setting up its fourth manufacturing plant in India had come about a year before, the subsequent processes such as identification and acquisition of land along with required approvals were completed with lightning speed.
HMSI laid the foundation stone for its plant in Vithalapur in the Mandal region of Gujarat earlier last week.
HMSI is not the only auto company. US-based auto major Ford Motor Company’s Indian arm, Ford India, is set to soon commission commercial production at its Sanand plant. The plant, coming up next to the Tata Motors facility, entails an investment of $1 billion. The company plans to make 240,000 cars and 270,000 engines in this plant.
R C Bhargava, chairman, Maruti Suzuki India Ltd, recently told Business Standard that the Indo-Japanese car maker is planning to start work at its Hansalpur facility in Mandal (near HMSI's upcoming plant) by the end of this year.
The region, which has seen an influx of Japanese companies off late, would also see another Japanese auto maker starting operations. Honda Cars India has started buying land for its third plant in the country, and an official announcement and signing of agreement with the state government could happen soon.
Y K Alagh, economist and former Union minister for planning, programme implementation, statistics and power, pointed to another angle to this barrage of investment announcements.
He feels that in the run-up to the Vibrant Gujarat Global Investors' Summit, the state always sees a slew of investment announcements.
“As such, Gujarat has always been an industrialised state, with a focus on the manufacturing sector, right from the 1980’s and the 1990’s . And to Modi’s credit, he has not let the speed slow down during his tenure. But, much of this investment has come from domestic companies,” Alagh said.
Though Gujarat is popular for its investor-friendly destination image, industry analysts say Modi’s pitch may have been planned and timed to highlight the launches.
Apart from pharma and auto majors, many fast-moving consumer goods (FMCG) players are also lining up investments in manufacturing, particularly in Gujarat.
Nivea India, an affiliate of the Beiersdorf AG started its greenfield plant in Sanand recently, whereas P&G-Teva joint venture is also working on its Sanand project.
Sources said Colgate is setting up a plant at Sanand with an investment of around Rs 200 crore. However, the company didn’t confirm the move.
While the timing for his ‘Make in India’ campaign could be strategic, insiders point out that the idea, obviously, did not come about overnight.
“Modi has been toying with the idea of a ‘Made in Gujarat’ brand ever since the first Vibrant Gujarat in 2003. Now, as he has moved to Delhi, he has taken this idea to the national stage,” said Sunil Parekh, founding curator and mentor for Global Shapers of World Economic Forum (WEF) who has closely worked with Modi during the Vibrant Summits.
Modi is definitely putting his experience as the chief minister of a state to good use at the Centre.
A senior bureaucrat in the state capital pointed out that as the CM he had empowered the bureaucracy in the state to take decisions, so as to enable faster implementation of plans and projects.
“He is replicating the same model in Delhi. For global investors to choose India as their manufacturing hub, they have to have confidence in the country’s bureaucracy that is without red-tapism,” he reasoned.
HELPING HAND
Investments lined up in Gujarat
Company: Abbott
Rs 450 crore
Place: Jhagadia
Company: BASF
Rs 1,000 crore
Place: Dahej
Company: Ford India
$1 bn (Rs 6,100 cr)
Place: Sanand
Company: Honda Motorcycle and Scooter India
Rs 1,000 crore
Place: Vithalapur
Company: Colgate
Rs 200 crore
Place: Sanand
(Source: industry)
