DPIIT may seek budget measures to support 100 products for import substitution. This plan aims to fix supply chain gaps in sectors like auto components and machinery. "The objective is not merely to substitute imports but also to develop a more resilient domestic industrial ecosystem," an official said on Wednesday.
These include the 100 products for import substitution identified after extensive consultations between departments and industry to plug vulnerabilities in supply chains against frequent export restrictions. The exercise was led by the department and the products cover sectors like auto components, chemicals and machinery.
The support measures will likely range from fiscal incentives and assistance for technology acquisition to tariff interventions that protect domestic manufacturers as they build local capacity. The objective is not merely to substitute imports but also to develop a more resilient domestic industrial ecosystem and reduce exposure to disruptions in global supply chains, the official said.
The proposed initiative would complement existing government programmes to deepen domestic manufacturing, including the Production Linked Incentive (PLI) scheme covering 14 sectors, such as electronics, pharmaceuticals and automobiles, as well as substantial fiscal support for semiconductor manufacturing. However, the latest exercise places particular emphasis on intermediate goods, specialised industrial inputs and capital equipment, which are essential for downstream manufacturing but have received relatively less focused attention.
Vulnerabilities linked to excessive Chinese dependence became very visible last year when it imposed curbs on the export of critical minerals. Beijing recently went beyond raw materials and expanded its export control regime to restrict heavy machinery, specialized capital goods, and dual-use industrial equipment. The products covered include full-face shield Tunnel Boring Machines (TBMs), walking excavators and specialized marine dredging items among others.