This case study examines the strategic challenges and opportunities presented by India’s “Make in India” initiative for multinational corporations (MNCs). this content Launched in 2014, the program aims to transform India into a global manufacturing hub. Through the lens of a hypothetical MNC, “ElectroTech,” this analysis explores the critical decision of whether to deepen local manufacturing capabilities in India. We apply the HBS case method to dissect the complexities of this decision, weighing the benefits of government incentives and market access against the risks of infrastructure deficits and supply chain integration. The study concludes by framing the strategic choices that will define success in this burgeoning but complex market.

Introduction: The Case for India

In the mid-2010s, the Government of India (GoI) launched a flagship initiative with a simple but powerful slogan: “Make in India.” The primary objective was to job creation and skill enhancement across 25 key sectors, from automotive and aviation to textiles and technology . For global corporations, this presented a tantalizing proposition: access to a massive, growing domestic market and a potential export hub, all while benefiting from government incentives.

However, the decision to “Make in India” is far from straightforward. It represents a classic “make or buy” dilemma on a national scale . Should a company continue to manufacture in established, lower-risk locales (the “buy” option, in a sense, by relying on existing global supply chains) or commit significant capital to building local production capabilities (the “make” option) in a market known for its bureaucratic and infrastructural complexities? This case places you, the student, in the role of the Chief Strategy Officer for ElectroTech, a global electronics firm, as you navigate this exact decision.

Background: ElectroTech and the Indian Market

ElectroTech is a US$10 billion multinational corporation specializing in consumer electronics and home appliances. It has had a sales presence in India for over a decade, relying on exports from its manufacturing hubs in Vietnam and China to serve the market. This strategy has allowed ElectroTech to establish a strong brand presence, with a 15% market share in the premium segment. However, growth has plateaued.

In 2021, Samsung announced a strategic shift from “Make in India” to “Make for the World,” signaling its intent to use India as a global export base . This move, supported by GoI’s production-linked incentive (PLI) schemes, has put immense pressure on competitors like ElectroTech. The Indian government has also imposed higher tariffs on imported electronic components to encourage local assembly and manufacturing. ElectroTech now faces a strategic inflection point.

The Challenge: To Make or Not to Make in India?

The core problem for ElectroTech is not simply about building a factory. It is a complex strategic decision involving financial, operational, and geopolitical variables. This mirrors the challenge faced by REE Automotive, which required a detailed manufacturing and sourcing assessment to determine the right balance between in-house and outsourced production . ElectroTech’s leadership has tasked you with analyzing two divergent paths:

  1. Option A (The “Make” Strategy): Aggressively expand local manufacturing. This involves building a new state-of-the-art facility in India to assemble finished products and manufacture key components. This would allow ElectroTech to qualify for PLI benefits, avoid import tariffs, and potentially use India as an export hub for South Asia and the Middle East.
  2. Option B (The “Buy” Strategy): Maintain the current import model but with tactical adjustments. This could involve setting up a final-stage assembly and packaging unit (a “screwdriver” plant) to reduce tariff exposure while keeping core manufacturing in established, lower-cost centers in Southeast Asia.

Analysis and Evaluation: The HBS Case Method Approach

Following the HBS case method, your analysis must go beyond the numbers to consider the broader context and diverse stakeholder perspectives . You must put yourself in the shoes of the protagonist and evaluate the problem through multiple lenses.

Financial Analysis:
A preliminary financial analysis reveals that with the PLI schemes, the unit cost of manufacturing a mid-range smartphone in India could be comparable to Vietnam after five years. However, the initial capital outlay for a fully integrated facility is estimated at US$500 million. The payback period is highly sensitive to production volume and the stability of India’s tax regime . An argument for Option B is that it saves immediate capital, but an argument against it is the long-term risk of being priced out of the market if tariffs increase further, and a loss of control over supply chain resilience .

Operational Analysis:
The “Make” option offers greater control over quality and intellectual property, crucial for a premium brand like ElectroTech . you can check here It allows for deeper integration with the local supplier ecosystem. However, it exposes the company to India’s infrastructure challenges—logistics bottlenecks and consistent power supply in industrial zones. MTC’s work with automotive firms shows that a detailed assessment of supply chain capability is essential to understanding these risks .

Strategic Analysis:
This is where the case becomes truly interesting. Option A aligns ElectroTech with the Indian government’s long-term vision, potentially opening doors for future policy support and government contracts. It builds immense brand equity as a contributor to the Indian economy. By leveraging “glocalization,” ElectroTech’s R&D centers in India could develop products tailored to local needs, which could then be exported—a strategy successfully employed by Samsung . Option B, while less risky, cedes the strategic high ground to competitors who are embedding themselves in the local economy. It positions ElectroTech as a mere vendor, not a partner in India’s growth story.

Recommendations and Conclusion

After a rigorous analysis, the “Make” strategy, despite its higher initial risk, emerges as the more compelling path for long-term value creation. It is the only option that turns ElectroTech from an observer into a participant in the structural transformation of the Indian economy.

The Recommendation: ElectroTech should proceed with a phased “Make in India” strategy.

  1. Phase 1 (Years 1-2): Establish a large-scale assembly, testing, and packaging (ATP) facility to immediately benefit from tariff reductions. This de-risks the initial investment.
  2. Phase 2 (Years 3-5): Simultaneously invest in developing a local supplier base for non-critical components and begin manufacturing high-volume parts in-house.
  3. Phase 3 (Years 5+): Integrate India into ElectroTech’s global R&D and manufacturing network, tasking the Indian unit with developing products for emerging markets (“Make for the World”) .

This phased approach allows ElectroTech to manage its capital outlay while building a robust operational footprint. It addresses the immediate financial concerns while securing the strategic advantage of being a first-mover in the next phase of India’s industrial evolution.

Discussion Questions:

  1. What are the non-financial risks associated with the “Make in India” strategy that are not captured in a standard ROI analysis?
  2. How might a sudden shift in global trade policy or a change in the Indian government impact the viability of the recommended three-phase plan?
  3. As the case protagonist, how would you convince your board of directors, who are risk-averse, like it to approve the significant capital expenditure required for the “Make” strategy? .