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What sectors heavily depend on imports

  • Electrical equipment such as smartphones and computers are a key part of India’s import bill.
  • Around 88% of the components used by the mobile handsets industry are imported from countries like China.
  • Over 60 per cent of the country’s medical devices are imported as well.
  • Other products heavily imported into the country are cells and modules used by the country’s solar power industry.

What sectors partially depend on imports?

  • India’s pharmaceutical industry is capable of making finished formulations without depending entirely on imports.
  • The country is currently trying to encourage domestic firms to make these key ingredients, known as fermentation-based APIs, as India imported around Rs 249 billion worth of key ingredients (40% of domestic consumption), including fermentation-based ingredients in FY19.
  • Medical devices like ventilators also rely on imports of several crucial components.
  • Some auto manufacturers depend on imports for various components, while the country’s electric vehicles industry is dependent, “to a large extent” on Chinese imports.
  • Local dyestuff units in India are also heavily dependent on imports.

Sectors that are already self-reliant

  • India is not as dependent on imports for some textile components like yarn.
  • The country does have the capacity to domestically make critical medical products like hot water bottles, mercury thermometers, hypodermic needles, wheelchairs and patient monitoring display units.

Issues with scaling up production in import dependent sectors

  • The manufacture of some of the key products that India imports such as semiconductors, displays and other very capital-intensive electrical equipment may not be possible soon as manufacturing these requires large, stable sources of clean water and electricity.
  • They also need a high degree of policy certainty as these require high upfront investments.
  • Indian firms can however begin producing less sophisticated components if certain policy measures are taken.
  • A key issue holding back manufacturing in the country and a lack of flexibility in labour laws, high costs and low availability of land and high cost of electricity.

-Source: Indian Express

November 2023