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Industry I

Vision and Mission

The Industry I Vertical envisages an all-round development of the industrial and mineral sector in India. It also works towards encouraging optimum mineral exploitation, decreasing the import of various minerals, and strengthening the supply chain by means of value addition.


The Vertical focuses on continuous growth of the industry by developing new policies for achieving sustainable long-term growth and updating existing ones to bring them on a par with global standards. The Vertical also coordinates DPIIT, Department of Commerce, Ministry of MSME, Department of Revenue, Ministry of Mines and Ministry of Corporate Affairs.

The Vertical also plays a crucial role in enabling active engagement of the states and relevant stakeholders towards achieving milestones for the industrial and economic development of India. It aims to bring together innovation, technology, and efficient management at the core of policy formulation and implementation.

The Minerals Division of the Vertical works towards ensuring raw material security for all industries, enhancing co-production technology metals, energy critical metals and rare earth elements and ensuring the sustainability of the environment. It focuses on strengthening institutions, encouraging the development of research and technology, creation of infrastructure, skill development, development of a database of mineral resources, environmental sustainability of mining, and suitable policy changes in line with the overall strategy.

 

Who’s Who

Key Initiatives

Production-Linked Incentive Scheme (PLI)

Manufacturing is the backbone of all nations. A concerted effort towards attracting substantial investments for the creation of large manufacturing facilities, combined with a sharp focus on efficiency and economies of scale, can help Indian manufacturing become globally competitive.


The Production-Linked Incentive scheme is designed to incentivise massively enhanced production for a limited number of eligible anchor entities that will invest in technology, plant, and machinery, as well as research. It will also have beneficial spillover effects via the creation of a big supplier base for the anchor units established under the scheme. Along with the anchor units, supplier units will also help generate massive primary and secondary employment opportunities. A key benefit of the PLI scheme is that it can be implemented in a very targeted manner to attract investments and strategically enter certain segments of global value chains (GVCs). This will help bring scale and size in key sectors and create and nurture global champions.


The sectors for PLI have been shortlisted on the basis of their potential for revenue and employment generation. The extent of benefit to the rural economy and its criticality in the next few decades have also been considered while finalising the sectors. With a focus on building a forward-looking manufacturing segment, the scheme incentivises upcoming technologies, which represent the biggest economic opportunities of the 21st century. These include advanced cell chemistry batteries, electronic and technology products and solar photovoltaic modules. The scheme also intends to generate large-scale employment by incentivising the development of traditional, labour-intensive sectors such as food processing and textiles. Finally, the scheme envisages globally integrated manufacturing in sectors such as automobile and auto components, pharmaceuticals, telecommunications, white goods, and steel. Each of these sectors will have specific criteria of investment, production volumes and employment. The beneficiaries will be shortlisted based on their level of commitment towards achieving scale while meeting other performance parameters, such as minimum investments, minimum incremental growth, among others.

 

High-Level Committees (HLCs) on Mines and Minerals Sector

A high-level committee headed by Vice Chairman, NITI Aayog, was constituted to examine the mines, mineral and coal sectors. The committee has sought to enhance exploration and domestic production, reduce imports, and achieve rapid growth in exports. The members of the committee include the Cabinet Secretary; CEO, NITI Aayog; and secretaries of the ministries of Finance, Revenue, Mines, EFCC and Coal. With the view to finalize its recommendations, the committee held extensive stakeholder consultations with i) Central Government Ministries/Departments ii) State Governments iii) Central and State PSUs iv) industry bodies v) private sector vi) international corporates in the mining industry.


The committee deliberated on several factors afflicting the mining sector, including the expiry of leases on 31.03.2020 and 31.03.2030, allocation regime for mineral blocks, statutory clearances, rationalization of taxes, non level playing field, transfer of leases, regulatory reforms, and distinction between captive and non-captive mining and enhancing exports. A detailed report was submitted to the Government and its recommendations are under implementation.

 

Sub-Committees on Rare Earths

Rare Earths (RE) are critical in hi-tech applications in strategic sectors such as defence, atomic energy, space, petroleum, green energy, consumer electronics and several others. Self-sufficiency in RE is thus vital and critical to these sectors. India has significant Rare Earths resources—both primary and secondary—and yet the country imports these to fulfil most of its domestic requirements. An expert committee was constituted by NITI Aayog to evolve a strategy for self-reliance and develop a roadmap to address restrictive trade practices and harness the availability of domestic and global RE resources. The recommendations of the committee are being taken up through multiple sub-committees. These committees are on overseas acquisition of RE resources and promotion of RE industry in India, augmenting and updating RE resources, establishing technologies for RE extraction from fly ash, establishing technologies for RE extraction from red mud, strengthening the recycling of e-waste, and establishing the prospects of RE conversion to magnets.

 

Developing Capacity in India for Manufacturing Nd-Fe-B Magnets

Neodymium-Ferro-Boron (Nd-Fe-B) magnet is a high-efficiency magnet with usage in miniature devices. India is a net importer of these magnets. This is because currently there exists a significant gap in its value chain from mineral to magnet in terms of production of RE metal from RE oxides and the manufacturing technology required to produce RE Permanent Magnets (OR REPM) on a commercial scale.


The Bhabha Atomic Research Centre (BARC) has developed a laboratory-scale process for the conversion of RE oxide to RE metal. BARC currently uses this process to produce up to 1.5 kilograms of Neodymium (RE metal), which is then provided to the Defence Metallurgical Research Laboratory (DMRL) for development of REPMs.
The technology developed by BARC is in the process of being transferred to private players as shortlisted by Indian Rare Earth Limited (based on the conditions specified by BARC and post detailed interactions to ascertain the technical and financial capabilities of private players). BARC will also build a project report outlining the technology and the tentative costs involved in setting up the plants.

 

Export Preparedness Index 2020 (EPI)

The Export Preparedness Index 2020 was developed by NITI Aayog in partnership with the Institute for Competitiveness to rank all States and Union Territories on the basis of their export readiness and performance. EPI 2020, launched in August 2020, is based on four major pillars: export policy, business environment, export infrastructure and export performance.


The EPI report can be used by States and Union Territories to benchmark their performance against their peers and analyze the potential challenges to develop better policy mechanisms to foster export-led growth at the sub-national level. The index also provides analytical insights and inputs to States and Union Territories to improve their understanding of export opportunities. 

 

Attracting Japanese Investments

India provides an attractive option for strategic relocation of industries by countries looking for alternative supply chains in the context of changing geopolitical situations due to the Covid-19 pandemic. Japan, for example, is actively looking to shift production back to Japan and select other countries. It has announced an economic stimulus package towards achieving this objective. NITI Aayog, in partnership with DPIIT, Invest India and the Indian Mission in Tokyo, engaged proactively with select Japanese investors and companies—Nidec Corporation, Yazaki Corporation, Daikin Global, Kobe Steel and Panasonic Corporation—to facilitate their investments and expansion plans in India. Issues highlighted by the investors were taken up with the concerned Ministries and Departments or the States to provide timely resolutions.

 

Initiatives for Improving Competitiveness of Textile and Apparel Sector

The textile and apparel sector has high employment generation potential. Following are the initiatives undertaken by the Vertical towards the development of the textile and apparel sector in India.


Several challenges currently impede the growth of the Indian textile sector: small size of production units, fragmented manufacturing, low labour productivity, high logistics cost, inversion in tax structure and geographically dispersed supply chains. To create global champions in the textile sector and to achieve size and scale by removing disabilities of major textile players in the country, the Focus Product Incentive scheme was conceptualized by NITI Aayog for enhancing India’s manufacturing capabilities in the manmade fibres (MMF) and technical textiles segments. The proposal has been shared with the Ministry of Textiles for further processing.


An inter-ministerial group has been constituted to examine the issues and suggestions related to GST rates, inverted duty structure and import duty on manmade fibres. The report by the group, ‘Unleashing Potential of Manmade Value Chain’, was released in January 2020. The recommendations made are at different stages of implementation.
A study on the assessment of mega textile parks and PPP structuring options has been initiated.


The Vertical organized a meeting with the Clothing Manufacturers’ Association of India in June 2020 to discuss issues regarding the additional line of credit and stressed assets in the context of the Covid-19 pandemic. The recommendations derived were sent to the Ministry of Finance and Reserve Bank of India.

 

Research Work and Whitepapers

Study on ‘Preparation of a Roadmap for Creating Global Champions in Automotive Industry in India’

The Indian automotive sector is a USD 100+ billion industry with overall exports of USD 27 billion (2019), comprising auto OEMs (USD 11.7 billion) and auto components (USD 15 billion). Although exports grew at a CAGR of 11.6% (FY16–19), India’s share in global automotive trade has been less than 2% in value terms—indicating a significant opportunity for growth. This has been the driving force for the Vertical’s research study on a roadmap to create global champions in the automotive industry in India. The recommendations of the study will be taken forward by the Department of Heavy Industry.

 

Study on ‘Integration of MSMEs on e-Commerce Platforms’

The Central and State Governments have certain hard and soft infrastructure that can be utilized for aggregating sellers. The data thus generated can be leveraged for onboarding them in the e-commerce space. A sustainable business via e-commerce can be achieved by introducing a digital infrastructure platform connecting MSME sellers and traders to existing nationwide marketplaces. A study on the ‘Integration of MSMEs on e-Commerce Platforms’ was commissioned in October 2020, which is currently underway. It aims to cover the evaluation of the entire e-commerce and MSME ecosystems in India and develop a roadmap for the integration of MSMEs on e-commerce platforms.