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From iPhone 14 to Ola, India has $1.2 trillion plan to get factories out of China

In India, half of all infrastructure projects are delayed and one in four exceed the projected budget.

In India, half of all infrastructure projects are delayed and one in four exceed the projected budget. Prime Minister Narendra Modi believes that technology is the solution to these eternal and infamous bottlenecks.

Under a 100 trillion rupee ($1.2 trillion) mega project called PM Gati Shakti – Hindi for power of speed – Modi’s administration is creating a digital platform combining 16 ministries. The portal provides investors and businesses with a total solution for project design, seamless approvals and easier cost estimation.

“The mission is to carry out projects without time and cost overruns,” Amrit Lal Meena, special secretary of logistics at the Ministry of Trade and Industry, said in an interview in New Delhi. “Global companies choosing India as their manufacturing center is the goal.”

Fast-tracking projects will give India an advantage, especially with China still largely closed to the outside world and companies increasingly adopting a China-plus-one policy – seeking other countries to expand or buy out – to expand their business. businesses and supply chains diversify. Asia’s third-largest economy offers not only cheap labor but also a talent pool of largely English-speaking workers, though its rickety infrastructure keeps many investors away.

“The only way to compete with China, other than countries having to move, is to be as cost-competitive as possible,” said Anshuman Sinha, a partner at Kearney India who leads transportation and infrastructure. practices. “Gati Shakti is about making it easier to have a flow of goods and manufactured components across the length and breadth of the country.”

The key pillars of the project are identifying new production clusters that do not exist today, and seamlessly connecting those locations to the national rail network, ports and airports, Sinha said. “If you peel off the layers of Gati Shakti, it consists of identifying nodes and strengthening the logistics network that connects those nodes.”

Reducing red tape through technology is crucial for India to unclog its stalled infrastructure projects. Of the 1,300 projects that Gati Shakti’s portal currently oversees, nearly 40% were delayed, according to Meena, due to issues related to land acquisition, forest and environmental clean-ups, resulting in cost overruns. At least 422 projects had some issues and the portal resolved issues in about 200 of them.

For example, under Gati Shakti, the government will use technology to ensure that a newly constructed road is not re-excavated to lay telephone cables or gas pipelines, a government agency promoting investment in India said. The plan envisions modeling infrastructure projects along the lines of what Europe did after World War II or what China did between 1980 and 2010 to raise the country’s “competition index,” the government agency’s Invest India said.

“Today’s India is determined to invest more and more in developing modern infrastructure and is taking every step to ensure that projects do not face roadblocks and delays,” Modi said in a speech at the opening last year. of the program. “Quality infrastructure is the key to triggering various economic activities and creating employment on a large scale. Without modern infrastructure, all-round development cannot take place in India.”

Indeed, data on the Ministry of Statistics and Program Implementation website paints a picture of delayed, over-budget projects, which are hurting the country’s economic recovery in a post-pandemic world. In May, India had a total of 1,568 projects, of which 721 were delayed while 423 exceeded original implementation costs.

Since Modi came to power in 2014, Modi has increased spending on infrastructure to create new jobs and bolster an economy hit by an aggressive wave of Covid-19 infections. He has had early success.

Apple Inc. now plans to begin production of the iPhone 14 in India about two months after the product’s initial release from China, while Samsung Electronics Co. in 2018 the world’s largest mobile phone factory opened in the country. has pledged to build the world’s largest electric scooter factory locally.

The government is also using the Gati Shakti portal to spot infrastructure gaps in last and first-mile connectivity, Meena said.

It is prioritizing 196 projects to close gaps and increase port connectivity for the transportation of coal, steel and food, he said. The Ministry of Road Transport is using the portal to design 11 greenfield projects under the government’s $106 billion Bharatmala plan to build 83,677 kilometers (52,005 miles) of roads by 2022.

“There is further focus on modern warehousing, digitization of processes, skilled labor and reduction of logistics costs,” said Meena. “For any manufacturer, choosing India as their production destination would be a sought-after decision.”

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