The commerce and industry ministry today said work is on to frame a new industrial policy with an aim to create jobs for the next two decades, promote foreign technology transfer and attract USD 100 billion FDI annually.
The policy is expected to be released in October.
A discussion paper -- 'Industrial Policy-2017' -- floated by the Department of Industrial Policy and Promotion (DIPP) in this regard noted that despite India attracting huge FDI, foreign technology transfers have remained at "assembly level".
"Benefits of retaining investments and accessing technology have not been harnessed to the extent possible. FDI policy requires a review to ensure that it facilitates greater technology transfer, leverages strategic linkages and innovation," the paper said.
"What measures can facilitate technology transfer between foreign enterprises and domestic industries?" it added.
Seeking comments on the paper till September 25, the DIPP said the result of this exercise is to formulate an outcome- oriented actionable industrial policy that provides direction and charts a course of action for a globally competitive Indian industry which leverages skill, scale and technology.
Making a case for the new industrial policy, it said India today, as it was in 1991, is at an inflection point.
In 1991 it was a country trying to break the conservatism in enterprise but today it is a resurgent India aspiring for its rightful place on the world stage, the paper added.
It said India needs a "future ready" industrial policy so that the country attracts "USD 100 billion inward FDI annually" in medium terms and "gainful" employment of the millions of aspirants who join the workforce over the next two decades in the long run.
Highlighting that India is now at the mid-point of the demographic dividend phenomenon which is expected to continue for another 20-25 years, the paper says there are several related concerns, including "projected upward trends in automation leading to job losses"
The paper said India needs to strengthen global strategic linkages by creating global brands and more FDI.
It also noted that concerns have been raised about the brand value of Indian products, significantly low value addition and the minimal positive externalities from FDI.
In the long run, the policy outcome should be that the number of global Indian firms increases in the Fortune-500 category, the document said.
Activities across the value chain for component manufacturing, design and R&D activities have to be strengthened.
"How can the FDI policy channelise investments into the potential sectors to increase domestic value addition, strengthen linkages and enable brand building?" is among the several questions posed for stakeholders in the paper.
The paper stressed on ensuring sustainability and responsible industrialisation. It says there should be a fine balance between industrial growth and improvement in environment and sustainability.
It has outlined several constraints to industrial growth -- inadequate infrastructure; restrictive labour laws; complicated business environment; slow technology adoption; low productivity; challenges for trade; and inadequate expenditure on R&D and innovation.
Referring to ease of doing business, the document said despite efforts on this part "business environment in India still remains cumbersome".
"At present our labour productivity is roughly half of China and a fraction (one-eighth to one-tenth) of Western Europe and US," it added.
To ensure sustainability and responsible industrialisation, the paper also seek comments on "What are measures to ensure minimal/zero waste from industrial activities? and which sectors need to be targeted to radically cut emissions?".
Industrial infrastructure in India suffers from lack of funds and inefficiencies. The sector's financing relies heavily on banks due to the lack of developed debt and bond markets.
Stakeholders have been also asked to comment on "What alternatives to banks can be developed improve access to capital for MSMEs Peer to Peer Lending, Crowd funding etc; and Can a credit rating mechanism for MSMEs be looked upon to provide them easier access to funds?"
DIPP also sought comments on key reforms that can enhance labour market flexibility.
It also wants to know how can "the problem of inverted- duty structure" be addressed and also be balanced against obligations under multilateral or bilateral trade agreements.