NEW DELHI: As part of a series of steps to revive the economy, the Government is mulling a slew of incentives for local production, while building tariff walls to protect them from an expected flood of cheap imports.
The Government is considering proposals to come up with a package of incentives for fresh capital expenditure as well as plant upgradation plans and research and development projects in a bid to incentivise domestic industries in selected sectors.
At the same time, it will be asking government departments and PSUs to assist domestic industry by encouraging procurement of 'Made in India' products for their use. Central departments and States will be asked to relax labour laws especially in SEZs and come up with single-window clearances for new industries.
"Some of this was being planned as part of attempts to woo industry from China. But now plans are larger as an attempt to revive manufacturing and Make in India," said officials.
India is keen that many of the factories fleeing China after the spread of coronavirus and disruption of global-supply chains shift to the country's shores, but till now has had limited success in wooing companies to India.
Both Commerce and Finance Ministries also believe that as manufacturing revives in rival countries, these nations would start dumping goods at extremely cheap rates in the global markets as their own domestic and export demands would remain low.
"We are already witnessing this in the case of China and some other East Asian countries where manufacturing has restarted in a bigger way. We have started anti-dumping probes against these imports. But our apprehension is that a larger wave of cheap imports is in the offing and unless we take steps, these would hurt domestic production which has just started reviving," officials said.
Commerce Ministry has already identified sectors which would need duty protection including solar, electrical, machinery and auto parts industries. "Many of these are in the MSME sectors and are particularly vulnerable to intense price competition," officials said.
Officials said power equipment, mobiles and a host of other items purchased by the Government will now on have to be Indian made. Even the defence ministry has been roped in and attempts will be made to buy indigenous products.
Recently, the Government decided to give state-run BEML the contract to make mine ploughs attached to T-90 tanks for an estimated Rs 557 crore under a 'Buy and Make' in India programme.
Officials pointed out that some of the moves were already bearing fruit. In the mobile phone market, beside Foxconn and Wistron Corp, now the world’s second-largest iPhone maker Pegatron, is also planning to set up a factory here.