Since the onset of the coronavirus pandemic, India's long-standing plan to drastically reduce its dependence on imports — from China as well as elsewhere — has gone into overdrive. After incidents of violence along the India-China border in Ladakh, the government has given its green signal to place tighter restrictions on the import of 371 items — from toys and plastic goods to sports items and furniture — which contribute about $127 billion to the annual import bill.
To achieve this, the government is planning to undertake a series of non-tariff barriers, as raising import duties suddenly might hurt the domestic manufacturers that depend on imports. As a result, restrictions on imports will be placed through the establishment of product standards, incentives for domestic manufacturing, and discussions with business stakeholders to progressively source from a broader range of nations.
A large chunk of India’s imports come from China, across product categories. These will help in direct import substitution, according to officials, who added that electronics, drugs, apparel, and consumer durables were also on the list of items on which import restrictions were being considered.
Performance-linked incentive schemes for battery cells, furniture, leather and toys, among other sectors, are being drawn up by the government to pull in more foreign investments and act as a bulwark for domestic manufacturing.
Vocal for local
Simply reducing imports was not the priority, the PM said. Giving a fillip to his 'Vocal for Local' call, Modi said the appreciation of local goods and services should be pushed by all citizens. "If we do not praise our own goods, they will not get the opportunity to become better," Modi said.
Modi also gave a call to double down on skill development at a national
stage. "When things continue to come in from abroad, our national
trove of skills and human resources gets destroyed over generations," he said. The PM said public policy could be used easily but skilfully to push domestic production, referring to a ramp-up in PPE, mask and ventilation manufacturing amid the coronavirus crisis.
All these have been possible due to the resilience and inherent strength of India's economy. India saw record 18 per cent growth in foreign direct investment (FDI) last year, Modi said. "Even when the pandemic was raging, large foreign companies were coming to India."