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The Rise of India as a Manufacturing Hub: A $1.2 trillion plan to snatch factories from China.

Infrastructure projects in India are delayed 50% of the time, and one in four is over budget. Prime Minister Narendra Modi has decided that technology is the solution to these endless and familiar bottlenecks. 

100 trillion rupee ($1.2 trillion) mega project called PM Gati Shakti—Hindi for the force of speed—is a digital platform working with 16 ministries that his administration is developing. This portal offers companies and investors a complete solution for project planning, a smooth coordination process, and easier cost forecasting. 

In an interview in New Delhi recently, Amrit Lal Meena, Special Secretary, Logistics, Ministry of Commerce and Industry, said, “The challenge is to execute projects without time and cost overruns.” The target is global companies choosing India as their manufacturing hub. ” 

Since China is largely closed to foreign labor, fast-tracking projects from India would often be a plus-one in China and a plus-one policy for many companies. This is where global companies find other countries to expand their operations or source their products. This would diversify their business and supply chain processes. 

The broken infrastructure of the Asian economy keeps many investors away, even though it is Asia’s third-largest economy and offers cheap jobs, often from English-speaking workers. 

“Gati Shakti aims to facilitate the movement of goods and manufactured components across the length and breadth of the country.”

The main pillars of the project are the identification of new production groups that do not yet exist.

Sinha said that to seamlessly connect these places with the railway network, ports and airports of the country is a tall order. “When you peel back the layers of Gati Shakti, it’s about identifying the nodes and strengthening the logistical network that connects the nodes.” 

Cutting red tape is critical to easing India’s congested infrastructure, and doing so through technology is crucial. Of the 1,300 projects currently tracked by the Gati Shakti portal, nearly 40% have been delayed.

According to Meena, it was a delay in the acquisition of land, forest, and environmental pruning, and resulting cost overruns. Out of 22 projects that had delays and problems, the portal has already solved 200.

For example, under the Gati Shakti platform, the government does not dig newly constructed roads to lay telephone cables or gas pipes.

The plan calls for infrastructure modelling similar to what Europe did after World War II or what China did between 1980 and 2010, raising the country’s “competitiveness index,” government agency Invest India said in a statement. 

In his speech at the inauguration of the program, Modi said, “Today India is committed to investing more in developing modern infrastructure and is doing everything possible to ensure that projects do not face roadblocks and delays.

“Quality infrastructure is the key to launching multiple economic activities and creating jobs on a larger scale.” Without modern infrastructure, there can be no development in India.
The information on the website of the Ministry of Statistics and the implementation of the programme gives a picture of late, over-budget projects that hinder the recovery of the national economy in the post-pandemic world.

In India, there were a total of 1,568 projects in May, of which 721 were delayed and 23 exceeded initial implementation costs. 

Since coming to power in January, Modi has increased investment in infrastructure to create new jobs and support an economy hit by an aggressive wave of COVID-19 infections.  

Apple Inc. now plans to start production of the iPhone 14 in India, about two months after the product was first launched in China, while Samsung Electronics Co. opened the world’s largest mobile phone factory in the country in 2018.

Home-grown Ola Electric Mobility Pvt. has promised to build the world’s largest electric scooter factory at the site. 
The government is also using the Gati Shakti portal to identify infrastructure gaps in the last mile and first mile of connectivity, Meena said.


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