Sood calls for long-term strategy
India must double down on ramping up domestic capacity in at least 15 of the country’s largest non-oil import items including electronics, coal, iron-steel and non-ferrous metals and vegetable oils to effectively achieve the objective of Atma Nirbhar Bharat (self-sufficient) in the medium-term of 2-3 years, an analysis by ASSOCHAM has noted.
The analysis, based on the latest data, shows that electronics goods are the largest non-oil import items.
Despite the country being under partial lockdown, India imported electronic goods worth US$2.8 billion in just one month of May 2020.
“In the circumstance of the industry operating in a normal way, these imports are near about US$5 billion a month – a huge drain on the forex which needs to be curtailed,” the ASSOCHAM note said.
The Chamber Secretary General Deepak Sood pointed out, “While we need to work on a long-term strategy to reduce our dependence on crude oil, in the short- to medium-term, we must move in a mission mode to be Atma Nirbhar in at least 15 of the critical sectors.
“We should work on a twin-track of not only investing more to ramp up capacity but also ensure that the end- consumers get the best of the quality products at internationally competitive prices. Self-reliance in the real sense would mean an aggressive production and pricing strategy involving scale and speed of execution.”
The recent Ministry of Electronics and Information Technology (MEITY) scheme of production – linked incentives and encouraging champions can be a game-changer if pursued vigorously, he said. Both domestic and FDI should be encouraged in the endeavour.
Other major items of large imports include pharmaceuticals intermediates, textile yarn, made-up, fertilizers, wood and wood products, transport equipment, machine tools, electrical and non-electrical machinery. “The country is capable of becoming self-reliant in all these sectors in the next few years,” the ASSOCHAM paper said.
Likewise, even in the May month of truncated industrial production and low electricity demand, India had to import coal, coke and briquettes worth US$1.31 billion. In a normal production environment, monthly imports of the coal and related items aggregate US$2-$2.5 billion. “It is an ironic situation that we import so much coal when India has coal reserves, amongst the largest in the world,” the ASSOCHAM note said.
However, the recent major reform of allowing commercial mining in the private sector should help reverse the situation and take the country towards ‘Atma Nirbhar Bharat’.
The entire metal pack – iron & steel, non-ferrous – account for monthly imports of around US$3 billion and can be substantially reduced, leveraging domestic capacity and coming harsh on dumping.
A similar scenario can be seen in chemicals, artificial resins and plastics all accounting for an average monthly import of about US$3.5 billion.
When it comes to agriculture products, imports of vegetable oils, fruits and vegetables alone account for over US$1 billion a month, in normal times. “These imports can be substantially reduced in a matter of few crop seasons; by incentivizing production of oilseeds and motivating farmers to reduce over-dependence on wheat and rice.” #imports #trade #markets #revenue #production #investment /fiinews.com
