Curbs, PLI, Mandatory Quality Norms Facilitating Reduction Of Imports Of Some Non-Essential Goods

These measures along with others like levying anti-dumping and countervailing duties have been undertaken to keep a tab on non-essential imports and to provide a boost to domestic production capacity.

An import bill on the higher end impacts the trade deficit which further affects the current account deficit. ( Image Source :Getty )

Measures like restrictions on inbound shipments of some goods, production-linked incentive schemes, and compulsory quality norms, are facilitating the reduction of imports of non-essential goods like TV, tyres, wallpaper, and AC gas compressors. 

These measures, as reported by PTI citing an anonymous official, along with others like levying anti-dumping and countervailing duties have been undertaken to keep a tab on non-essential imports and to provide a boost to domestic production capacity in such import-intensive sectors. 

An analysis by the Commerce and Industry Ministry revealed that import restrictions levied on tyres helped reduce the imports by 74 per cent to $74 million in 2022-23, against $276 million in 2019-20. On a calendar year basis, these imports fell to $36 million till July this year, against $353 million in 2018.

Earlier in June 2020, the government levied curbs on imports of certain new pneumatic tyres used in motor cars, buses, lorries, and motorcycles to enhance domestic manufacturing and reduce imports from nations like China. Further, the inbound shipment of wallpapers declined 77 per cent to $10 million from April to August this year, against $44 million in the same period last year owing to the launch of paper import monitoring system (PIMS). 

Further, putting in place quality control order (QCO) measures for footwear has led to a decline in imports by 54 per cent to $75 million during July-August this year, against $163 million in the same period last year. The order was implemented in July this year and was intended to contain imports of sub-standard goods and encourage local production. 

Another industry expert stated that the import of goods like sandals and components like soles are reducing from nations like China, Taiwan, Hong Kong, Vietnam, and Bangladesh. The import of AC gas compressors has dipped 10 per cent to $177 million during the April-August period this year, against $197 million in the same period last year. 

The PLI scheme for white goods, such as AC components and LED lights, was approved with an outlay of Rs 6,238 crore. The official noted that an inter-ministerial committee comes together regularly to discuss further measures to reduce imports of non-essential goods. 

The official noted, “The commerce and industry ministry is sensitising other ministries to see areas where we have competitiveness and where we can increase our manufacturing and cut import of those goods.”

The top ten merchandise import sources for India include China, the US, the UAE, Switzerland, Saudi Arabia, Hong Kong, Iraq, and Germany. An import bill on the higher end impacts the trade deficit which further affects the current account deficit. Increased imports also affect the country’s foreign currency exchange rates. 

Import restrictions have recently been levied on some IT hardware goods like laptops and computers, and QCOs have been imposed on certain products like helmets for police force, water dispensers, ceiling fans, aluminium, and copper goods.