Commerce ministry shares list of 102 items to ministries for enhancing domestic capacity to cut imports

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November 10, 2021 9:02 PM

According to the analysis, the import of these goods has been consistently increasing or have held high import shares across the long, medium and short terms.

exports indiaHigh imports compared to exports widens the trade gap of a country and adds burden to foreign reserves. (Representative image)

The commerce ministry has shared a list of as many as 102 products whose imports are high and are increasing consistently, such as coking coal, certain machinery, some chemicals, and digital cameras, to different ministries to look at ways for enhancing their domestic capacity with an aim to reduce imports, an official said.

As part of an exercise to reduce the country’s import bill, the ministry has undertaken a detailed analysis of these 102 products for enhancing domestic production opportunities of those items.

According to the analysis, the import of these goods has been consistently increasing or have held high import shares across the long, medium and short terms.

The cumulative share of these items is 57.66 per cent in total import during the March-August 2021 period.

“These goods have domestic production opportunities,” the official said adding that the commerce ministry has suggested different departments and ministries products that are showing high import growth and may be prioritised for immediate interventions to increase local production.

Out of 102, 18 products have both high share and high import growth rates. These include gold, crude palm oil, integrated circuits, personal computers, urea, stainless steel scrap, refined copper, cameras, machines for transmission of voices and images, sunflower seed oil, and phosphoric acid.

The main objective of identification is to reduce their import dependence as their imports are growing consistently and have a significant share in the value of imports.

“As the data has indicated that these items have been demanded consistently for import in all periods, it is supply rigidities in the domestic economy that need to be corrected,” the official added.

Ministries and departments with whom the list has been shared include industry, IT and electronics, mines, heavy industry, pharmaceuticals, steel, oil and natural gas, fertiliser, telecommunication, shipping, food processing, and textiles.

India’s merchandise imports in April-October 2021 was USD 331.29 billion, an increase of 78.71 per cent over USD 185.38 billion in April-October 2020 and USD 286.07 billion in April-October 2019, according to preliminary data of the government.

The commerce ministry earlier took several steps to curb imports of non-essential items and promote domestic manufacturing. It has imposed restrictions on imports of products such as colour televisions and also framed quality control norms for several goods.

High imports compared to exports widens the trade gap of a country and adds burden to foreign reserves.

The ministry’s analysis has included products that have shown an increase in imports in the short run (March-August 2021), medium run (2018-19 to 2020-21) and long run (2011-12 to 2020-21). A filter of USD 10 million per month and average import growth of items that are above the overall import growth of India has been applied to identify items driving import growth.

India has imported items under 11,897 product categories during the period 2011-12 to 2020-21. On an average, there are 8,723 commodities which have registered positive growth and out of these, 274 goods have an import value of more than USD 120 million in 2011-12 to 2020-21 or USD 10 million per month.

During this period, major items that have registered surge include non-industrial diamonds, steam coal, natural gas, coking coal, parts of telephonic apparatus, crude palm oil, aeroplanes, personal computers, urea, crude soya bean oil, solar cells, tubo jets and cashew nuts.

Import of gold, crude palm oil, integrated circuits and personal computers have averaged to about USD 35.1 billion, USD 4.8 billion, USD 2.1 billion, and USD 2.5 billion, respectively, between 2011-12 and 2020-21.

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