GoI: 10 Sectors identified to cut imports

On June 3, 2020, the Department of Promotion for Industry and Internal Trade identified 10 sectors where in the imports are to be cut. This includes textiles, jewelry, mobile, gems, pharmaceuticals, garments, electronics, machinery, etc.

Highlights

The GoI has recently changed the set targets in order to become self-reliant in footwear, furniture and air conditioner. In parallel, the Government has also laid groundwork to become self-reliant in 10 other sectors.

Objectives

The Government has selected these 10 sectors in particular as India has natural advantage in these sectors. Hence, given a small push, these sectors have the potential of becoming the strength of the country.

The Government has made the decision of cutting imports to target the quality of domestically made products. Also, India will focus on increasing quality controls.

Imports in India

India imported 467.2 billion USD worth goods in the year 2019-20. Of this, leather and leather products amounted to 1.01 billion USD, machinery of 37.7 billion USD and machine tool imports of 4.2 billion USD.

The AC industry concern

The AC industry of India is largely dependent on imports, mainly imported compressors. These imports account to 60%-65% of AC production value.

What is the issue?

The Japanese split AC companies that are market leaders are taking advantage of India-ASEAN Free Trade Pact and importing from Vietnam and Thailand claiming to be registered in India. This is so common especially in new inverter category ACs.

Concerns of Atma Nirbhar Bharat Abhiyan

The steps of cutting imports and encouraging domestic manufacturing is being done under Atma Nirbhar Bharat Abhiyan. However, these steps may bring on certain issues. They are as follows

  • India might go back to Import Substitution Industrialization.
  • Trade Distortion. The prescribed limits of import duties of WTO may be crossed.
Import Substitution Industrialization

The ISI is criticized for the following

  • Only the consumer goods are boosted
  • The employment growth rate is slow
  • The productivity growth is minimal and the agriculture sector declined greatly
  • The internal migration increased.

SWADES Initiative: Skill Mapping programme for Indians returning from Abroad

The Government of India is to conduct SWADES initiative to map the skills of Indians returning from abroad. SWADES is Skilled Workers Arrival Database for Employment Support.

Highlights

The SWADES initiative has been begun under Vande Bharat Mission. The initiative aims to generate database of Indians returning from abroad based on their skill sets and experience. The database will then be used to fulfil need of foreign companies and Indian companies.

The maximum number of Indians returning are mainly from UAE, Oman, Saudi Arabia, Kuwait and Qatar. These persons returning were primarily employed in automotive, oil and gas, tourism, aviation, IT, hospitality and IT.

SWADES initiative

The initiative is to be conducted by Ministries of Civil Aviation, External Affairs, Skill Development and Entrepreneurship. The returning citizens will need to fill up forms under the programme. The form consists of details of job title, work sector, years of experience, etc. A toll free facility has also been set up to support citizens for their queries in filling the forms.

The main aim of the initiative is to provide employment for the Indians returning from abroad.

Background

The COVID-19 pandemic led to the closing of companies all over the world. This made 1000s unemployed. Thus, they are returning to India.

Vande Bharat Mission

The Mission aims at bringing Indians from all over the world. Under the mission, the non-scheduled commercial flights will carry people from Singapore, USA and London. Currently, the mission is working in bringing around 80,000 Indians from Gulf countries.