The Central Government is going to take the biggest and historic step till date in the direction of ‘Self-reliant India’ and ‘Make in India’. According to a report, the government has prepared a masterplan, under which preparations are being made to completely stop or reduce huge imports worth 189 billion dollars (about Rs 18 lakh crore). To achieve this big goal, the government has finalized a comprehensive list of 1,272 foreign products, which will now be manufactured directly in India instead of importing them from abroad. This will have a direct impact on the country’s manufacturing sector, employment and global trade balance.
Preparation to reduce imports worth 189 billion dollars
According to a report by Business Standard, the central government has made a product-level strategy in collaboration with the states. Its objective is to reduce imports worth $ 189 billion annually by increasing domestic manufacturing capacity for 1,272 products. These products include chemicals, electronics, machinery and specialty steel. According to the report, the annual import of each of these products is more than 50 million dollars and either they are not produced in India or are produced in less quantity as per the requirement. The role of states will be important in implementing this plan, because matters like land acquisition, industrial approval and investment incentives mostly come under their jurisdiction.
What things does India have the ability to change?
This exercise is based on the government’s assessment of India’s import basket (list of goods to be imported) for fiscal year 2026. According to the report of ‘Business Standard’, only 26 percent of imports have been considered practically suitable for replacement through domestic manufacturing.
The other 46 percent included products like crude oil, gold and coal, which cannot be easily replaced through local manufacturing. The remaining 28 percent included products that India already manufactures competitively, but continues to import for price or quality reasons.
According to the report, India’s import bill of goods will reach a record $776 billion in fiscal year 2026, which includes $246 billion spent on crude oil and gold. Its objective is to identify exactly where there is capacity shortage in India.
The way of working was handed over to the states
The Center has advised states to create sector-specific manufacturing clusters for identified products and adapt their industrial policies to the needs of those industries. States have also been asked to create a ‘single-window clearance system’ on the lines of the ‘National Single Window System’ to speed up the process of regulatory approvals. According to the document, the proposed financial assistance may include exemption in stamp duty and incentives for capital expenditure. Such measures will be designed and implemented by individual states depending on the industries they want to attract.
The ‘Department for Promotion of Industry and Internal Trade’ has also formed working groups to identify more products that can be produced in the country. The document states that schemes like ‘Advance Authorization’ and ‘Export Promotion Capital Goods Programme’ currently allow manufacturers and exporters to import certain raw materials, inputs and machinery at low or zero duty. Developing local supplier clusters can gradually reduce the need to import some of these products.
This report came a day ago
Bloomberg had reported on July 16 that the Prime Minister’s Office (PMO) had directed key ministries to identify more than 100 products that are highly import dependent and could be replaced or compensated for by indigenously made products. Quoting Bloomberg, officials said that the list included electronics, chemicals, essential medicines, fertilizers, semiconductors, automobiles and machinery.
The report said that a task force led by Shaktikanta Das, former Governor of Reserve Bank of India and current Principal Secretary to the Prime Minister, was preparing its big blueprint. Members of the Prime Minister’s Economic Advisory Council were also included in this. Measures being considered included incentives for private and foreign investors, joint ventures with government companies and changes to the trade scheme to encourage exporters to use more indigenously produced inputs and capital goods. Bloomberg’s report said that talks are still going on and no final decision has been taken.
Rising import bill is raising concerns
According to Commerce Ministry data, India’s import of goods increased by 19.89 percent to $216.18 billion in the April-June quarter of financial year 2027 compared to a year ago. During this three-month period, the goods trade deficit increased to $86.86 billion.
On July 16, the rupee closed at 96.3450 against the dollar. India’s foreign exchange reserves on July 3 were $674.19 billion, which is about $54 billion less than the record level made in February. Ajay Srivastava, founder of the Global Trade Research Initiative, told Business Standard that deep-scale manufacturing requires consistent product-level industrial policies, engineering capabilities, tooling and skilled suppliers.
He said that building capacity across the entire production chain, rather than limiting domestic activities to final assembly of imported parts, will determine how much of the identified import bill India can ultimately reduce.
