India will take fresh steps to curb imports of electronics products even as it strives to push the sales of items made in the country, ranging from textiles and pharmaceuticals to cars, a meeting chaired by commerce minister Suresh Prabhu decided on Thursday.
“The high-level inter-ministerial meeting asked key economic ministries to examine measures on diversification of export base and increase domestic production in order to deal with merchandise trade deficit,” an official release said.
Officials said the government and the RBI would also work on ways to ease rules for overseas hard currency borrowings by key sectors so as to help them pay for imports which fed into exports.
“Just as rules have been eased for oil companies, rules could be also eased for others,” said officials.
“The main area of concern as far as imports are concerned are electronics and coal … our imports of electronics products is increasing by leaps and bounds,” they added.
Last year, India imported $22 billion worth of telecom instruments. Coal and coke accounted for $23 billion.
Studies say some 50-60 per cent of the country’s demand for electronic products and 70-80 per cent of the components are imported.
“These can be drastically cut if domestic production is encouraged and permissible duty barriers established,” officials said.
The coal ministry is being asked to see how production and washing can be stepped up to cut down on import.
Gold, pearls, precious stones and petro goods, which constitute big import items, are not being touched at present as the first two go into feeding India’s own exports, while the import of crude is a necessity for the developing economy.
Trade analysts feel electronic imports will surpass oil by 2020 and could touch an astounding $300 billion if current growth trends continue. To reverse this trend, the government wants to effect taxation changes to progressively force manufacturers such as Apple, Samsung and their suppliers to shift base to India.
However, import duty increases last year and this year have already attracted global furore.
The European Union, the US and Japan are among those who have raised objections before the World Trade Organisation over India’s move to raise customs duties on mobile phones, televisions and projectors.
