It has indeed been a short but swift journey of 'Make in India', and the destination it seems has changed from a mere symbolic moral high ground to a substantive cost and benefit analysis. Last year, when the industry body NAREDCO made a pitch for 'Made in India' in the sector, there were very few takers even within the built environment. The call for the same to help the Indian currency from further depreciation was seen more as nationalist overtone than a viable suggestion. The same call this time around, is seen as a road-map for the long term benefit of the economy in general, and the real estate sector in particular.
After all, the call for 'Made in India' this time around has not come from the industry associations but the prime minister, Narendra Modi, a man the sector seems to believe can change the fortunes of the business. The long term benefits are today being evaluated against the shortterm logistical challenges.
According to NAREDCO's estimates, developers import nearly USD 10 billion worth of building construction products and services every year for their projects. The industry body maintains the imports not only include products like flooring, cement, home automation but also services like technology, consultancy and architects for which payments are made in dollars. The Indian real estate sector imports these services especially for developing high-end luxury projects. Such imports account for nearly 30-50 percent of the total cost of the project.
Sanjay Dutt, Executive Managing Director South Asia, Cushman & Wakefield, maintains that the 'Make in India' initiative by prime minister Narendra Modi denotes his vision of making the country a manufacturing hub for the world. The more important implication will be for the economy as manufacturing growth has been negligible in the past two years, and must be revived in order to scale up economic growth.
“States such as Karnataka, Andhra Pradesh, Haryana, Gujarat, Maharashtra and Tamil Nadu will stand to benefit as they are development focused, as will those regions that have lesser land acquisition hurdles. Other States will also be encouraged to create and implement attractive industrial policies, improve infrastructure and provide for more balanced growth across the country. From the real estate point of view, such an initiative will result in strong growth for the sector, as more emphasis is being laid on urbanization and bridging the gap between rural and urban India“, says Dutt.
Analysts have endorsed the idea of `Make in India' in its spirit. They maintain that besides the creation and development of new manufacturing hubs, there is also an emphasis on other sectors such as IT-BPM, tourism and hospitality, health, real estate and construction, and the creation of world-class physical infrastructure such as highways, ports, railways, and power.