With the Prime Minister putting forth self-reliance as the redeemer of the dwindling economy, India is now all set to expand its local capacity by cutting on import dependence. A sectoral strategy for reducing import dependence is in the pipeline.
The new policy by the government is expected to decrease import dependence in sectors like footwear, furniture, technical textiles, medical equipment, defence production, electronics, and more.
The primary aim is to attain self-reliance through the creation of indigenous value chains. The covered sectors are expected to receive fiscal incentives like tariff protection and credit support through an influx of products that are cheaper than those imported, particularly from China.
Sources from an economic ministry stated that all custom duty exemptions would be reviewed by the government in a comprehensive manner. The ones hurting domestic manufacturing will be cast aside. In light of the Covid-19 crisis, a view on this is expected by the end of this quarter.
The government is now identifying sectors carefully on the basis of the availability of skilled workers, supply chains, and the potential to create job opportunities. The news comes after the recent military faceoff in the Galwan Valley in eastern Ladakh.
The trade between Indian and China benefits the latter more. The trade figures released by the General Administration of Customs of China (GACC) showed that Bilateral trade between the two countries was about $92.68 billion in the year. At the same time, India’s trade deficit with China stood at $56.77 billion in 2019.
However, sources from the ministry stated that the sectoral strategy has nothing to do with the recent military action from both countries. The new policy only concerns the existing ‘Make in India’ and ‘Atmanirbhar Bharat Abhiyaan’ (Self-reliant India Initiative).