Are we really prepared for 'Make in India', invite foreigners to come and set up shop here and 'make' all the things that they wish to, and export, where they please?

A lot of importance was attached to the visit of Chinese President Xi Jinping and the revival of trade relations with new political aspirations of both. There was great hope of China investing $100 billion to beat the Japanese planned investment of $35 billion, but in the end, 13 memorandums of understanding (MoUs) were signed, investment proposals amounted to $20 billion and the silver lining was the prospect of Indian export of several items. One of the most important items of import from India was iron ore, which was conspicuous by its absence.

Today, China is not only the largest producer of steel, but also the largest consumer. The world production of steel is around 1.6 billion tonnes, of which 47% output comes from China. Japan, US and India, in that order, are the next three large producers, but India's production of 81 million tonnes is actually a drop in the ocean of steel. In the recent past, China was the biggest consumer of low grade iron ore from Goa, which it had found a way to mix with high grade ore from Brazil and Australia to produce the type of steel needed in their country.

It may remembered that iron ore mining had to be stopped due to illegalities associated with the industry and only last year, the Supreme Court gave conditional permission to restart the mining operations, classifying the mines as category A, B and C. While category "C" was prevented from any mining operations, some units under "A" have began their work.

In the meantime, the steel industry in India has had no alternative but to import its needs of iron ore, and leading players like Jindal Steel are reported to have received shipments of over 6 million tonnes to keep their furnace burning.

Prior to the mining ban, it may be remembered that Indian exporters recklessly adopted the policy of exporting high grade iron ore, leaving the poorer cousins for consumption in domestic market. A number of them could not use the iron ore pellets made from these ores, and some quantity was exported to Iran.

Before the arrival of President Xi Jinping, there was lot of speculation that iron ore would be one of the important items on the agenda. In fact, according to the press, Kai Xue, a corporate lawyer in Beijing and adviser on international mining projects had stated, "it would have been ideal if India had offered to the Chinese President that the country would gladly release 100 million tonnes of iron ore" for export. This would have not only pleased the Chinese President, but would have reduced India's deficit with China, and more than helped their steel industry. This did not figure at all in the discussions!

Now, what has all this to do with the proposed "make in India" launch that Prime Minister Narendra Modi expects to detail this week?

To make this happen, a lot of ground work is necessary. Are we really prepared for such a huge launch, invite the foreigners to come and set up shop here and "make" all things that they wish to, and export, where they please? No, far from it! We must consider the fact that our own steel industry is on a hand to mouth existence and depends upon imported iron ore. Steel production, it must be borne in mind, is the fundamental requirement for any industry to commence its operations. How other countries tackle such a situation?

Indonesia, for instance, introduced the concept of domestic obligation - making it mandatory to meet its "national" needs first - before anything can be exported, particularly natural resources like minerals.

Similarly, in the case of China, it implemented a law to restrict export of coal by abolishing 13% VAT (introduced in 2006,). This made it possible for coal availability for the domestic industry on a priority basis.

These examples would take us back to our own basic need for simplification of procedures, clearances, licensing, lease renewals and other related environmental issues. These need to be tackled first, corrected and an "on line" clearance, as assured by Prakash Javedkar, the Environmental Minister is actually in place.

Also, hypothetically, even if an "all clear signal" is given overnight, production in the form of mining activity cannot commence straightaway. NMDC, a government owned mining corporation, for instance, doing a job well, without blemish, cannot increase its production at the drop of a hat.

In support of the Prime Minister Modi's 'Made in India' launch this week, what the Environmental Ministry and the State Machinery concerned should consider is "ad hoc" clearance of both category A and B mines, who may be allowed, with the Supreme Court's permission, to start the operations, as soon as possible, provided they "undertake" to "comply" with all the required formalities within six months. Such a Court order may also direct the concerned departments to ensure that they "clear" and complete all the "licensing, lease renewals and other related work" within 30/60 days of application of the miner.

If we do not take care about all these fundamental issues that prevent the work, we would be putting the cart before the horse!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)