Government identifies 500+ imported products for local manufacturing push to cut bill and boost resilience

NEW DELHI : The Indian Government is conducting a comprehensive review of over 500 imported products—ranging from machinery and fertilisers to silicon wafers and carbon fibres—to identify opportunities for domestic production, reduce import dependency, and enhance supply chain resilience amid ongoing regional instability. The initiative, led by the Ministry of Commerce and Industry, is collating data across ministries to assess import dependence, the time and capital required to establish commercially viable domestic manufacturing, and the strategic importance of each product.

Officials familiar with the development told the Economic Times that the Department for Promotion of Industry and Internal Trade (DPIIT) is actively analysing production capacity, industry bottlenecks, and domestic demand patterns. The exercise includes products such as harvester-threshers, parts of turbo jets, certain graphite variants, makeup preparations, dishwashers, industrial valves, and specific silicon wafers. The data being gathered includes the extent to which domestic demand is met through imports—categorised as high (60% or more) or medium (30–60%) import dependence—and the criticality of the product for maintaining continuity in domestic manufacturing and essential downstream sectors.

A senior official noted that the department is likely to shortlist around 100 items where imports are high but India already possesses sufficient capacity to produce them domestically. “Electronics and chemicals are two key sectors where imports are huge but the potential to export is also significant,” another official said, highlighting the dual opportunity to curb outflows and expand global market presence.

The push for localisation comes as India’s overall goods import bill reached $774.98 billion in the financial year 2025–26 (FY26), with major contributors including oil ($174 billion), electronics ($116.17 billion), and gold ($72 billion). Organic and inorganic chemicals alone accounted for $28 billion in imports during the same period. These figures underscore the scale of India’s import dependency and the potential savings and strategic gains from localisation.

The initiative aligns with Prime Minister Shri Narendra Modi’s recent call for citizens to support foreign exchange conservation and reduce the country’s rising import bill, especially in light of the ongoing conflict in West Asia, which has heightened supply chain vulnerabilities. By encouraging domestic manufacturing of high-import items, the government aims to build supply resilience, reduce vulnerability to external shocks, and strengthen the country’s industrial base.

The DPIIT is also evaluating the feasibility of scaling up production in sectors with high import intensity, ensuring that localisation efforts do not compromise quality or cost competitiveness. The exercise reflects a broader policy shift towards self-reliance (Atmanirbhar Bharat) and strategic import substitution, particularly in critical inputs that are essential for sustaining growth across manufacturing, agriculture, and infrastructure.

While shortlisting the final 100 products is still underway, officials indicate that the government may unveil targeted incentives—such as production-linked incentives (PLI), tax benefits, or infrastructure support—for industries that step up domestic production of these identified items. The outcome of this review could shape India’s trade policy, industrial strategy, and long-term economic resilience in an increasingly uncertain global environment.