India will fire on all cylinders to achieve atmanirbharta (self-reliance) and could offer tax sops, procurement preference in government contracts for domestically produced goods while imposing stringent non-tariff barriers to discourage imports.
Measures for sectors such as pharmaceuticals, furniture and leather are in focus and states could be asked to revamp their procurement processes to prefer local manufacturing. Prime Minister Narendra Modi said on Tuesday that the Covid-19 crisis has taught us the importance of local manufacturing, local market and local supply chains. “All our demands during the crisis were met locally. Now, it is time to be vocal about local products and help these local products become global,” he said.
Reported last month that the country has begun work on a continuity plan that includes cutting down import dependence, especially from China, by focussing aggressively on substitution while improving safety compliance and quality goods to gain global market share.
“The idea is to cut down dependence on reliance of imports from one country while encouraging local manufacturing… Why should we be importing furniture and leather in which we have competence?” a senior government official asked while speaking.
The government will look at areas where it has capability but continues to import, officials said. The commerce and industry ministry has identified medical textiles, electronics, plastics and toys as some sectors where local manufacturing and exports can be promoted in the next three months, or phase one, while phase two products include gems and jewellery, pharma and steel, in the next six months.
According to the official, the upcoming measures could include tax incentives and other support measures to make local manufacturing more competitive globally. “Support measures are also likely to aid local manufacturers build brands globally,” the official said.
“Swadeshi focus was not just an ideological concept presented. It is a serious thought that would be followed up with concrete steps,” said another government official.
Sharad Kumar Saraf, president of the Federation of Indian Export Organisations, noted that increasing localisation is a fallout of Covid-19 across the globe, but this will make market access for exports more difficult.