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Indian Economy

Import Cut to Become Self-Reliant

  • 03 Jun 2020
  • 4 min read

Why in News

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

Key Points

  • Identified Sectors: The sectors include 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.
  • Government’s Plan:
    • The government is looking for increasing domestic manufacturing and exploring the export potential in these areas.
    • For this, the 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.
  • PM’s Focus on AtmaNirbhar Bharat: Earlier, the Prime Minister had stressed on the 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.
    • He had emphasised on the need to build robust local supply chains and focus on Make In India.
    • He called for creating strong enterprises in India that can become global forces and help in generating employment.
    • He highlighted that India did not use to manufacture PPE kits earlier but the pandemic has shown that India can fulfill its own needs.
  • Schemes:
    • The government has brought various schemes towards making India a major player in sectors like medical devices, Active Pharmaceutical Ingredients (APIs). For example: Production Linked Incentive (PLI) Scheme.
    • However, 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.
  • With AtmaNirbhar Bharat, there is a danger of India going back to an import substitution framework.
    • Taking this path would also be quite daunting, as the financial and technological resources required would be very high.

Way Forward

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

Source: IE

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