DPIIT identifies 10 sectors to cut imports
Real Estate

DPIIT identifies 10 sectors to cut imports

While the Indian industry has been asked to set new targets towards building self-reliance in furniture, footwear and air conditioners, the government has parallelly begun laying the groundwork to achieve this in at least 10 promising sectors. Here, the emphasis is on targeting the quality of domestically made products so that “unnecessary” imports can be reduced in these sectors and the nation can find stronger footing in the global value chain.

Sectors already identified by the Department of Promotion for Industry and Internal Trade (DPIIT) in consultation with other ministries include capital goods and machinery, mobile and electronics, gems and jewellery, pharmaceuticals, textiles and garments. India has a natural advantage in these sectors, which can grow to become a strength for the country, according to DPIIT Secretary Guruprasad Mohapatra.

“A lot of work has to be done. Import dependence has to be reduced to the greatest extent possible and domestic manufacturing has to be ramped up, while export potential in these areas have to be explored,” said a senior government official on condition of anonymity. “This work has already begun. Ministries are looking at bringing more investment and making India a major manufacturing destination for their sectors,” the official said.

Prime Minister Narendra Modi on Tuesday had raised concerns with India’s dependence on imports, specifically highlighting the over 30 percent Imports in the air conditioners sector. “We have to reduce it fast,” he said.

The Indian AC industry, with an estimated Rs 12,000 crore market and sales of over 5.5 million units, is largely dependent on imported compressors — which accounts for 60-65 percent of an AC’s production value.

An executive tracking the market said that in the premium segment, especially the split AC category, several Japanese companies that are market leaders have been importing from Thailand and Vietnam by taking advantage of the concessional tariffs available under the India-ASEAN trade pact or bilateral Free Trade Agreements signed with these countries. This is especially so in case of the newer ‘inverter’ category of ACs, where the compressor specifications and built-in electronics are different.

Ministries are learnt to already be focussing on raising quality controls to make India globally competitive. “The quality is to improve, so there is a need for quality control orders and every ministry is identifying the orders to be issued. If necessary, then raising import duties may also be considered,” DPIIT’s Mohapatra had earlier told The Indian Express. “We have to emphasise Indian production of a certain scale, certain quality and certain standards. Then only can your product match up to the best in the world,” he had said. “While implementing measures like increasing import duties, we will need to make sure we are not crossing the WTO bound rates,” said trade expert Biswajit Dhar, professor at JNU’s Centre for Economic Studies and Planning.

“With Atma Nirbhar Bharat, there is a danger of India going back to an import substitution framework which may not be quite appropriate in the 21st century. Taking this path would also be quite daunting, as the financial and technological resources required would be very high,” he said.

“We need to be strategic in terms of the choice of sectors in which we want to be self-reliant. There should be a very strong case for increasing domestic value addition, besides considering aspects of consumer safety and national security,” he added.

However, here, measures like the home ministry’s intent to remove imported products from its central police canteens, while discriminatory, will not clash with India’s international trade commitments. “For government procurement, there is an exception. Countries are allowed to bend in favour of their producers,” said a trade economist.

Various schemes are already geared towards making India a major player in sectors like medical devices, APIs, according to Mohapatra. In some cases, the schemes are repackaged versions of older attempts by the NDA or UPA government to promote domestic production in these areas.

For instance, the government on June 2 invited applications from companies to invest in India under the second phase of the electronics manufacturing scheme, which has a capital outlay of up to Rs 50,000 crore.

An earlier version of a similar electronics manufacturing scheme, called the Modified Special Incentive Package Scheme had been notified by the previous UPA government in July 2012. It provided a capital subsidy of 20 percent to units inside special economic zones (SEZ) engaged in electronics manufacturing, and 25 percent to units outside SEZs.

The scheme, saw limited success, following which the second version of the scheme was approved by the Cabinet in March 2020 and notified on April 1. In addition to planning mobile manufacturing units, it plans to subsidise and provide incentives to peripheral device units such as charger and phone cover manufacturing units. As per Commerce Ministry, India imported $467.2 billion worth of commodities between April and March 2019-2020. Of this, leather and leather products were $1.01 billion, pearls, precious and semi-precious stones were about $22.4 billion and electrical and non-electrical machinery were $37.7 billion, while machine tool imports were about $4.2 billion.

The news has been originally shared by The Indian Express, titled ‘Cellphones, jewellery, textiles: Govt identifies 10 sectors to cut imports', on June 3, 2020. We have referred to the original article by the publisher with modified Title to suit our industry audience. To access the original article, click on the following: https://indianexpress.com/article/business/cellphones-jewellery-textiles-govt-identifies-10-sectors-to-cut-imports-6439637/ 

While the Indian industry has been asked to set new targets towards building self-reliance in furniture, footwear and air conditioners, the government has parallelly begun laying the groundwork to achieve this in at least 10 promising sectors. Here, the emphasis is on targeting the quality of domestically made products so that “unnecessary” imports can be reduced in these sectors and the nation can find stronger footing in the global value chain.Sectors already identified by the Department of Promotion for Industry and Internal Trade (DPIIT) in consultation with other ministries include capital goods and machinery, mobile and electronics, gems and jewellery, pharmaceuticals, textiles and garments. India has a natural advantage in these sectors, which can grow to become a strength for the country, according to DPIIT Secretary Guruprasad Mohapatra.“A lot of work has to be done. Import dependence has to be reduced to the greatest extent possible and domestic manufacturing has to be ramped up, while export potential in these areas have to be explored,” said a senior government official on condition of anonymity. “This work has already begun. Ministries are looking at bringing more investment and making India a major manufacturing destination for their sectors,” the official said.Prime Minister Narendra Modi on Tuesday had raised concerns with India’s dependence on imports, specifically highlighting the over 30 percent Imports in the air conditioners sector. “We have to reduce it fast,” he said.The Indian AC industry, with an estimated Rs 12,000 crore market and sales of over 5.5 million units, is largely dependent on imported compressors — which accounts for 60-65 percent of an AC’s production value.An executive tracking the market said that in the premium segment, especially the split AC category, several Japanese companies that are market leaders have been importing from Thailand and Vietnam by taking advantage of the concessional tariffs available under the India-ASEAN trade pact or bilateral Free Trade Agreements signed with these countries. This is especially so in case of the newer ‘inverter’ category of ACs, where the compressor specifications and built-in electronics are different.Ministries are learnt to already be focussing on raising quality controls to make India globally competitive. “The quality is to improve, so there is a need for quality control orders and every ministry is identifying the orders to be issued. If necessary, then raising import duties may also be considered,” DPIIT’s Mohapatra had earlier told The Indian Express. “We have to emphasise Indian production of a certain scale, certain quality and certain standards. Then only can your product match up to the best in the world,” he had said. “While implementing measures like increasing import duties, we will need to make sure we are not crossing the WTO bound rates,” said trade expert Biswajit Dhar, professor at JNU’s Centre for Economic Studies and Planning.“With Atma Nirbhar Bharat, there is a danger of India going back to an import substitution framework which may not be quite appropriate in the 21st century. Taking this path would also be quite daunting, as the financial and technological resources required would be very high,” he said.“We need to be strategic in terms of the choice of sectors in which we want to be self-reliant. There should be a very strong case for increasing domestic value addition, besides considering aspects of consumer safety and national security,” he added.However, here, measures like the home ministry’s intent to remove imported products from its central police canteens, while discriminatory, will not clash with India’s international trade commitments. “For government procurement, there is an exception. Countries are allowed to bend in favour of their producers,” said a trade economist.Various schemes are already geared towards making India a major player in sectors like medical devices, APIs, according to Mohapatra. In some cases, the schemes are repackaged versions of older attempts by the NDA or UPA government to promote domestic production in these areas.For instance, the government on June 2 invited applications from companies to invest in India under the second phase of the electronics manufacturing scheme, which has a capital outlay of up to Rs 50,000 crore.An earlier version of a similar electronics manufacturing scheme, called the Modified Special Incentive Package Scheme had been notified by the previous UPA government in July 2012. It provided a capital subsidy of 20 percent to units inside special economic zones (SEZ) engaged in electronics manufacturing, and 25 percent to units outside SEZs.The scheme, saw limited success, following which the second version of the scheme was approved by the Cabinet in March 2020 and notified on April 1. In addition to planning mobile manufacturing units, it plans to subsidise and provide incentives to peripheral device units such as charger and phone cover manufacturing units. As per Commerce Ministry, India imported $467.2 billion worth of commodities between April and March 2019-2020. Of this, leather and leather products were $1.01 billion, pearls, precious and semi-precious stones were about $22.4 billion and electrical and non-electrical machinery were $37.7 billion, while machine tool imports were about $4.2 billion.The news has been originally shared by The Indian Express, titled ‘Cellphones, jewellery, textiles: Govt identifies 10 sectors to cut imports', on June 3, 2020. We have referred to the original article by the publisher with modified Title to suit our industry audience. To access the original article, click on the following: https://indianexpress.com/article/business/cellphones-jewellery-textiles-govt-identifies-10-sectors-to-cut-imports-6439637/ 

Next Story
Infrastructure Energy

India urges states to consider nuclear power plants, lists utilities

India’s federal power minister urged states distant from coal resources to explore establishing nuclear-based power plants, in addition to identifying power utilities that could attract investment to support the rising energy demand. This year, the Indian government proposed in its federal budget a partnership with private entities to develop small nuclear reactors, aiming to boost electricity generation from sources that do not emit carbon dioxide. In a government statement, the power minister, Manohar Lal, advised states to consider setting up nuclear power plants at locations where coal..

Next Story
Infrastructure Energy

NTPC Green Energy sets price range for $1.2 billion IPO

NTPC Green Energy announced a price range of Rs 102 to 108 per share for its upcoming Rs 100 billion initial public offering (IPO). The renewable energy company’s IPO will open for bids on November 19 and close on November 22, with large "anchor" investors scheduled to bid on November 18. This IPO, a unit of the state-owned NTPC, is set to be the third-largest stock offering in the country this year, following those of Hyundai Motor India and Swiggy. Recent technological advancements have opened up possibilities for small wind turbines to function effectively in urban settings. Ministry of N..

Next Story
Infrastructure Energy

India considers small wind turbines for urban energy access

India’s carbon emissions are projected to increase by 4.6 per cent in 2024, accounting for 8 per cent of global emissions, as reported by the Global Carbon Project in its 2024 Global Carbon Budget. The report shows that global fossil CO2 emissions have reached a record high of 37.4 billion tonnes this year, marking a 0.8% per cent rise from 2023. When combined with emissions from land-use changes, including deforestation, the total CO2 emissions are expected to hit 41.6 billion tonnes, up from 40.6 billion tonnes in 2023. India’s rising emissions reflect an increasing demand for energy, w..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000