Import Cut To Become Self-Reliant – Economics

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Recently, the Union Government has identified 10 promising sectors to cut “unnecessary” import.

SECTORS

Capital goods and machinery, mobile and electronics, gems and jewellery, pharmaceuticals, textiles and garments.
Earlier, the government had asked the Indian industry to set new targets towards building self-reliance in furniture, footwear and air conditioners.

The government is looking for increasing domestic manufacturing and exploring the export potential in these areas.
Government is bringing more investment and making India a major manufacturing destination for these sectors.
The government is also focussing on raising quality controls to make India globally competitive.
If necessary, the government can also raise the import duties on these sectors without violating the World Trade Organisation (WTO) bound rates.

Need for self-reliance and a stronger focus on manufacturing locally by enterprises
To strengthen the economy against the impact of coronavirus and get the country back on the growth track
Emphasised on the need to build robust local supply chains and focus on Make In India.
Called for creating strong enterprises in India that can become global forces and help in generating employment.
Highlighted that India did not use to manufacture PPE kits earlier but the pandemic has shown that India can fulfill its own needs.

Making India a major player in sectors like medical devices, Active Pharmaceutical Ingredients (APIs). For example: Production Linked Incentive (PLI) Scheme.
In some cases, the schemes are repackaged versions of older attempts of the previous government to promote domestic production in these areas.
For instance, recently, the government invited applications from companies to invest in India under the second phase of the electronics manufacturing scheme.
An earlier version of a similar electronics manufacturing scheme, called the Modified Special Incentive Package Scheme was notified by the previous government in July 2012.

Concerns related to India’s dependence on imports e.g. over 30% Imports in the air conditioners sector.
As per the Ministry of Commerce, India imported $467.2 billion worth of commodities between April, 2019 and March, 2020.

The Prime Minister has talked about 5 Is to make India self-reliant – intent, inclusion, investment, infrastructure, and innovation.
There is a need to be strategic in terms of the choice of sectors.
India has a natural advantage in these 10 sectors and if work is done to strengthen these industries, these will support the country massively.