Thinking of an Import Substitution Policy: Nitin Gadkari

• Indian companies rely heavily on component imports for electronics production in India
• In fiscal year 2019, India imported electronic products valued at nearly four trillion rupees

Union Minister for MSME and Road Transport and Highways, Nitin Gadkari said that a policy on imports substitution is being thought of in the wake of the new economic situation created by COVID-19 pandemic. He called upon various stake-holders to convert knowledge into wealth by improving quality through innovations and cutting down cost.

Gadkari sited the example of a Nagpur based MSME Orange cluster taking up PPE making from scratch. These PPEs cost between Rs 550 to Rs 650 against the market price of about Rs 1200 for which country was heavily import dependent. The cluster is in a position to supply large quantity of PPEs.

Shri Gadkari was addressing the meetings via Video Conferencing with the representatives of Association of Lady Entrepreneurs of India (ALEAP) on impact of COVID-19 on startup eco-system and MSMEs.

India imported electronics valued at nearly four trillion rupees

The Union Minister emphasized that special focus towards export enhancement is the need of the hour and necessary practices shall be adopted to reduce power cost, logistics cost and production cost to become competitive in the global market.

Further, he mentioned that there is also need to focus on import substitution to replace foreign imports with domestic production. He added that industry should focus more on innovation, entrepreneurship, science and technology, research skill and experiences to convert the knowledge into wealth.

It is to be noted here that in fiscal year 2019, India imported electronic products valued at nearly four trillion rupees. This sector of imports, as per Statista, accounted for nearly 11 per cent of all imports into the country that year. Products include computer hardware, consumer electronics, electronic components and instruments and telecom instruments.

Opportunity for India which should be grabbed

The Minister recalled that Government of Japan has offered special package to its industries for taking out Japanese investments from China and move elsewhere. He opined that it is an opportunity for India which should be grabbed.

Some of the major issues highlighted and the suggestions given included: No licensing fee for transfer of technologies to SMEs, dissemination of schemes promoting livelihood for tribal areas, support to pharma sector SMEs in supply chain management and further extending tjree months moratorium given by RBI, extending soft loan, deferring/reducing GST etc.

Gadkari emphasized that industry should take a positive approach and tap the opportunities that will be created when the COVID-19 crisis gets over.