Right in the beginning, I want to make it clear that we are going to talk about ‘Made In India’ and not ‘Make In India’. We will focus on the seal or marking or imprint that you see on so many products across different categories. ‘Made In India’ in our mind is for products which are completely manufactured in India by Indian companies that use Indian resources to do so. At least this should be the ideal scenario for all the products we consume.
Now, over the past few decades, the arrival of foreign brands has made it all the more difficult to identify which products are Indian, and which products are only claiming to be Indian. One of the most ironic things as an Indian consumer is seeing a fully Chinese-owned company like Xiaomi labelling its products as ‘Made In India’ and succeeding in selling it like hot cakes. No one even questions the genuineness of the claim that is made on the product packaging.
Agreed that the company has a large manufacturing plant in the Sri City Special Economic Zone in Andhra Pradesh and another one in Sriperumbudur in Tamil Nadu. But, do we actually know as to how many of the components that go into the phones are actually made in India? India imported mobile components worth USD 13 Billion in 2018. Given that the lion’s share of the Indian mobile phone market is controlled by Chinese companies, a significant amount of these imports would have come from China.
So, in effect the mobile phone industry in India is only ‘assembling’ parts in India and not ‘manufacturing’ them. The same is true for Xiaomi which proudly highlights that its products are ‘Made In India’. One of the reasons why this is so rampant and is mostly misleading consumers is because the Government of India has not formulated any stringent guidelines for the same. Even if the guidelines are present, they are not being enforced to help consumers make the right choices.
The time to act is now
The USA is a country on the other end of this spectrum. The Federal Trade Commission in the United States has a 42-page guideline document that helps companies comply with the ‘MADE IN USA’ Standard. It also has an Enforcement Policy Statement on U.S. Origin Claims, which came into effect way back in 1997. The biggest example of how well enforced these guidelines are, can be seen on the back of any iPhone. Along with other mandatory information, the phones clearly have markings which read ‘Designed by Apple in California. Assembled in China.’
India too needs to work on a comprehensive set of guidelines for companies that want to inform customers that their products are indeed ‘Made in India’. For companies that do not fully comply with such guidelines and enforcement policies, the products can be marked as ‘Assembled in India’. This will be in the interest of transparency and will also help Indian consumers decide as to which brands they want to purchase and which they want to avoid. If such guidelines and policies come into force, Indian consumers can readily move away from Chinese products. In the long run, our consumer behaviour will force Chinese companies to procure more of their components and raw materials from India to comply with such guidelines and make their products truly Indian.
At the moment we have given every Chinese company present in India a free hand to mark their products with ‘Made in India’ as and when they choose. For a country that prides itself as the largest and most diverse democracy in the world, it is only natural that our government authorities take decisive action now and work on a detailed guideline as well as enforcement policy that works in the interest of Indian consumers and manufacturers.