India’s imports have only been rising despite its collective push for Atmanirbhar Bharat, Make in India and Production Linked Incentives (PLI) schemes as imported components still constitute a significant portion of most finished products, equipment, or machines manufactured at home. Be it a large manufacturing or engineering corporation or a micro-enterprise that employs just 5 or 10 people, all are dependent on imports of components that are not available in the country.
For instance, over 6 lakh micro, small and medium enterprises in Karnataka have to import various auto components, electrical or electronic items, chemicals, machine tools, machinery, industrial dyes, wools, yarn, cables, wires, metals, sheets, paints, etc., if they want to manufacture products and fulfill their customer requirements. In MSMEs, some 67% to 70% of components in automotive, engineering, textile and food processing are imported.
Prof. Narendar Pani, an economist and Professor and Dean at the National Institute of Advanced Studies at the Indian Institute of Science Campus, Bengaluru, said the country’s share of imports, as a proportion to GDP, has gone up massively. “So as imports go up we should make up with additional exports. But the fact is an increase in imports makes you dependent, the rupee becomes weak as imports have been causing inflation at home,’‘ Prof Pani said. “As imports increase at a time when demand is already sluggish, we end up with stagflation (inflation with market stagnation). Prices and costs of imports are increasing while the demand is falling.’‘
