The Union Government has spotlighted 10 important sectors in a bid to trim “unnecessary” imports. These areas include capital goods and machinery, mobile and electronics, gems and jewellery, pharmaceuticals, textiles and garments, among others. The overarching aim is to build self-reliance within the Indian industry, boost domestic manufacturing, and potentially make India a prime manufacturing destination for these sectors. This article delves deeper into the government’s plan, its schemes, and issues associated with this initiative.
Government’s Plan for Domestic Manufacturing
The government is actively striving to increase domestic manufacturing in these key sectors by attracting more investment into them. To attain the status of being a major manufacturing hub, the government is setting its sights on elevating quality control measures to align with global competitiveness. An interesting note is that, without breaking the World Trade Organisation’s (WTO) regulations, the government could potentially hike import duties in these sectors if deemed necessary.
The Prime Minister’s Focus on AtmaNirbhar Bharat
The Prime Minister has previously underscored the necessity for self-reliance as a means to rebuild the country’s economy in the wake of the COVID-19 pandemic. He emphasized on the potential benefits of local manufacturing, building robust supply chains, and focusing on the Make In India initiative. The goal is to create formidable enterprises within India that can compete on a global scale and generate employment opportunities.
Government Schemes Supporting Domestic Industries
In a bid to stimulate prominence in sectors like medical devices and Active Pharmaceutical Ingredients (APIs), the government has rolled out multiple schemes. One such example is the Production Linked Incentive (PLI) Scheme. Despite some of these schemes appearing as revamped versions of older programs, they retain their primary focus—boost domestic production. For instance, a recent invitation for applications from companies to invest under the second phase of the electronics manufacturing scheme mirrors an earlier scheme launched in 2012.
Addressing India’s Dependence on Imports
India’s considerable reliance on imports, particularly in sectors like air conditioners where imports make up over 30%, is concerning. According to the Ministry of Commerce, India imported commodities worth $467.2 billion between April 2019 and March 2020. The heightened focus on AtmaNirbhar Bharat does trigger concerns about a return to an import substitution framework. Such a trajectory could be challenging given the substantial financial and technological resources required.
Strategizing for Self-Reliance
The Prime Minister outlined ‘5 Is’ that are integral to making India self-reliant, which include intent, inclusion, investment, infrastructure, and innovation. Going forward, it’s important that strategic choices are made regarding the sectors where self-reliance is actively pursued. Taking into account these 10 key sectors, there lies an opportunity to exploit India’s natural advantages in these areas to support the country’s economic growth massively.