India Ramps Up Domestic Manufacturing to Reduce Import Dependence

New Delhi: The government has constituted six sector-specific working groups to identify as many as 100 products for promoting their domestic manufacturing and reducing import dependence.

These groups, to be chaired by the secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), are on pharmaceuticals, biotech and medical devices; chemicals and petrochemicals, textiles and footwear; capital goods, automotive and electric vehicles, and advanced capital goods; energy; construction equipment and infrastructure; and defence and aerospace (only for items with civilian applicability) and electronics.

"The working groups will deliberate on the list of items to be included for indigenisation," said an official, adding that the final list of each group would be submitted to the cabinet secretariat within three weeks.

ET had reported on Monday that the government is examining around 500 products including machinery, fertilisers, chemicals, cotton staple fibre, plastics, and carbon fibres, where localisation can be increased. The commerce and industry ministry is collating from different ministries, data related to import dependence, estimated time and capital investment required to achieve commercially viable domestic manufacturing capability, and national strategic relevance of the product, in an effort to reduce the country's import bill amid the ongoing West Asia crisis.

There are three grounds to be considered for inclusion in the final list of products - necessity, feasibility and symbolically important consumer goods, according to the official cited above.

Necessity includes high value of imports, dependence on land border countries (LBCs), essential for supply chain and coming from LBCs, and strategic importance that is essential for defence, economy or health.

In the feasibility ground, cost competitiveness in the long-run without sops, sufficient domestic demand and/or assured/reliable export market, are covered.