Import curbs likely on over 350 items to boost ‘Make in India’

NEW DELHI: The government has identified over 350 “non-essential” imports — ranging from toys and textile products to footwear and electronic goods — on which it intends to initiate a host of measures, including an increase in customs duty apart from putting in place quality control orders to reduce shipments into the country and encourage domestic manufacturing.

In addition, departments are looking into suggestions of waiving the requirement for global tender for government procurement in sectors where it thinks there is sufficient domestic capacity to execute a contract, sources told TOI. Several ministries such as textiles, electronics and IT and commerce and industry have been asked to initiate action on the identified list of products.

As part of the initiative, public sector companies may also be asked to list out their requirement for products and specifications for the next five-six years so that domestic industry knows the demand and plan accordingly. So, if the standard changes, Indian manufacturers can tweak their production accordingly, explained an officer.

The moves are part of the government’s thrust to ‘Make-in-India’ scheme, for which it has been working on ways to discourage imports.

So far it has largely depended on an increase in import duty for a host of products, including television sets and mobile phones, which the government believes, has helped push domestic manufacturing. Ministers have repeatedly pointed to the domestic production and assembly of mobile handsets in recent years as a result of this policy. Similarly, it has restricted the import of raw material for agarbattis, although a section of the domestic industry is unhappy with the decision.

Going forward, the government intends to pursue the plan vigorously and first up will be a quality control order for toys, such as dolls. Some of the duty hikes are expected to be announced in the budget, although officials are not ruling out midterm correction.Sources said that in segments such as electronics, the list will be drawn up carefully, recognising that imports of certain products need to be discouraged. A large part of India’s trade deficit is now due to the import of electronic goods and the government believes that the decision to sign the World Trade Organisation’s first Information Technology Agreement, allowing duty-free import of several electronic goods, was responsible for it.

Officials said the government will simultaneously pursue a strategy to seek investments from international players to locate manufacturing facilities in the country.

Several economists have, however, warned against using high import duties as a tool to restrict imports, arguing that it impacts the consumer adversely, who has to shell out more. Besides, inefficient domestic manufacturers get protection.