NEW DELHI: The government wants to push electronics manufacturing by attracting global players, push for local production of defence equipment, chemicals, which go into pharmaceuticals manufacturing and specialised steels in a bid to cut the country’s import bill.
Top commerce ministry officials said, “In preliminary discussions, we have identified these as major items, which we should try and increase production in a bid to cut down our import bill given the fact that the global economy is going through a slowdown and it would not be easy for us to increase exports.”
The ministry is acting as the nodal ministry in the consultation process with other ministries and has identified goods that include electronics including mobile phones and their parts, defence equipment, specialised steels, chemicals required for pharmaceuticals manufacturing, gold, coal and natural gas where production can be stepped up or indigenised.
India’s import bill stood at $514 billion in 2018-19, while its trade deficit or the gap between exports and imports stood at $154 billion for the year gone by. “One of the reasons why we delayed the RCEP was that we feared a surge in imports,” said officials.
Catalysing electronics manufacturing has been one of the goals of ‘Make in India’ project though with limited success.
“We are trying to attract the top electronics manufacturers to set up base here as well as get more chip makers to manufacture locally instead of importing chips from Taiwan, China and Korea,” officials added. India’s electronics imports touched a record $55.6 billion in 2018-19, against $51.5 billion the year before, and remained the largest driver of its trade deficit after oil, with China accounting for Lion’s share of this import.
A commerce ministry paper has already proposed a detailed sector-wise strategy for import substitution in electronics, telecommunications, electrical equipment and chemicals used in pharmaceuticals called APIs, which amount to a large chunk of India’s annual import bill.
The finance ministry will also separately be notifying schemes to encourage re-rolling of used gold to cut down India’s gold import bill which had dipped 3 per cent to $32.8 billion.