One-Day Symposium: Framing of India’s Industrial Policy: A Domestic Industry Perspectiverescheduled date: Monday 20th, January 2020
January 20 @ 10:00 - 17:00 UTC+5.5
It has been nearly three decades since the Government of India had issued a statement on industrial policy as a part of the economic reforms initiated in 1991.? The statement promised to pursue a sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology and increasing competitiveness.? Obtaining higher technology, increase exports and to expand the production base were the declared expectations from foreign investment and technology. The public sector was to be run on business lines so that it would continue to innovate and lead in strategic areas of national importance.? The experience, however, shows that the 1991 policy achieved, at best, limited success, especially in respect of developing a modern and competitive industrial sector through encouraging entrepreneurship.
Even by the mid-2000s it was obvious that the manufacturing sector was not performing well, in recognition of which the National Manufacturing Competitiveness Council (NMCC) was set up. The goal of achieving substantially high share of manufacturing sector in GDP set up by the NMCC continues to be elusive. Pertinently, the observations of an NMCC Working Group, set up by the then Prime Minister, regarding the costs of the open FDI regime especially in respect of technology transfer and development of local entrepreneurship were never given the attention they deserved and efforts to attract foreign direct investment (FDI) continued unabated.
While India did attract considerably large amount of FDI subsequently, question marks continue to be raised regarding FDI’s response to the priorities set by the government, especially in the strengthening of the manufacturing sector.? Not only the channel for importing technology by the domestic entrepreneurs narrowed significantly due to the liberal FDI policy which placed no caps on foreign participation in individual companies, they also did not spend meaningful amounts on R&D.? Many domestic entrepreneurs receded from their businesses, especially the technology intensive ones.? On the other hand, the public sector did not receive requisite trust and backing of the policymakers.? Even the Discussion Paper on Industrial Policy 2017 indicated the need to review India’s FDI policy.
The government is seeking to formulate a new Industrial Policy in this backdrop and after experimenting with Make in India. ?It is our considered view that in the long term interest of the economy such a policy must fulfil some of the main objectives of the earlier initiatives recounted above, in particular, increasing the share of manufacturing in the country’s value addition, encouragement to local entrepreneurship and facilitating the development of an innovation ecosystem that can guide the manufacturing sector while ushering in Industry 4.0. The above objectives should be met through a judicious mix of private and public sector participation. In other words, the new Industrial Policy should strive to create conditions where domestic enterprises, both in private and public sectors, will have a chance to assume leadership roles in strategic and key industries.
Keeping in view the importance of the subject, the ISID is organising a One-day Symposium Framing of India’s Industrial Policy: A Domestic Industry Perspective, on January 6, 2020 to provide domestic industry a forum to put forward its case, in particular at the sectoral level, and to interact with other stakeholders and academics.? The emphasis will be on offering concrete suggestions taking into consideration India’s international commitments and the global situation.
Click here to download the Concept Note of the Symposium