The process of trade and investment liberalization in India suggests the importance of history and process in a political explanation (Pierson 2004: 54-78; Mukherji 2010: 492). Prime Minister Shri Narendra Modi’s ‘Make in India’ global initiative allows a reconsideration of economic geography, that is, it’s time to attempt to incorporate the insights of the long but informal tradition in India (Krugman, 1991).
Modi’s approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale. Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one another (Krugman, 1991).
The Prime Minister has urged investors not to look at India merely as a market, but instead see it as an opportunity. “Development and growth-oriented employment is the government’s responsibility,” he said.
Krugman’s theories have shown, that these processes enables specialization and large-scale production, just what the Make in India program hopes to achieve. However, scaling economies also require attention in areas such as: tax policy, climate change, outsourcing, intellectual property rights, ‘ease of doing business’, ‘effective’ governance and skilled labor for manufacturing and other issues.