One of the fundamental problem in “Make in India” as usual is companies don’t care about the devices being imported. How India promotes this is by decreasing the tax for products that are made(read assembled) in India and tax cuts for setting up factories for manufacturing in India. Lets look into some of the steps that we could take to improve the situation in India
Provide Large Swaths of Land
Identify ideal location and accumulate large swaths of land by the government and provide them for lease to large companies. These should be perfectly located. Make the process so lucrative that the companies should feel at ease during this whole ordeal.
No sudden changes in Tax structure
There shouldn’t be sudden changes in tax structure for these companies. There should be a fixed structure for 10-20 years. Sudden changes will discourage the companies from investing more and new companies won’t be interested in coming to India
Allow to hoard cash
Allow foreign companies who setup manufacturing to hoard the cash without tax for 20 years. This would allow more cash flow to India or at least decrease the outward supply of cash
Forcing a change
This is the what I came here to say. There is a way to force the companies to start make in India. It isn’t to increase the tax. The problem with increasing tax is the Indian’s itself will be at loss due to this.
Define “Made in India” :- Made in India should be placed on to the product only if all the products that made it are produced in India. If any of the product isn’t, then it can be called only “Assembled in India.
So coming to our change, The products that aren’t “Made in India” including “Assembled in India” should have the following
- Product should have a minimum of 10 year no questions asked full replacement warranty. No dilution for any product should be there. If they want dilution, let them make in India
- Product should be able to return upto 90 days even if there is even wear and tear.
- Used products will attract a tax of 20% and can only be sold for less than half the price if it is second hand, and decreases 50% of the hand value with subsequent hands. There should be an id and track method for finding which hand it is currently.
- Products sold should have a pricing similar to the international market. So for introducing these things, there should be huge price increase.
- Companies who doesn’t adhere to these laws should be fined starting 100 crores if a complaint claim turns to be true
The above said things shouldn’t/aren’t applicable to the “Made in India” products. They can continue to be what it is now. I think if needed, this whole thing can be introduced in a months time and give the companies 1-2 years for making the necessary changes for this.
Consumer will benefit largely due to this. There is no price increase but gets a huge warranty. Companies may claim that people will abuse this. Let them abuse this until they setup manufacturing in India.
In my opinion, just few things like this is only needed for companies to think about setup manufacturing in India.