India Seeks to Reduce Import Reliance Amid Global Disruptions

India’s Prime Minister Narendra Modi’s office directed ministries to identify goods heavily reliant on imports and explore domestic production alternatives. The move comes as geopolitical tensions and supply chain vulnerabilities, highlighted by events like the Iran war, increase India’s economic risks.

Officials are considering subsidies and incentives to boost local manufacturing in sectors including electronics, chemicals, pharmaceuticals, and automobiles. The government recently approved a 1.9 trillion rupee ($19.7 billion) plan to support chip and smartphone production and is focusing on increasing domestic fertilizer output.

Economists note that this push for self-reliance is driven by necessity given increasing export controls and weaponized industrial policies globally. While replacing all imports is unrealistic, particularly for crude oil, gold, and critical minerals, the government aims to reduce dependence on items like pulses and edible oils through agricultural reforms. A taskforce led by Shaktikanta Das is developing a detailed import substitution blueprint.