Cutting down on imports an uphill task for India

PRIME Minister Narendra Modi’s strong pitch for the sale-purchase of Swadeshi products is aimed at promoting self-reliance amid global economic instability. He envisages Atmanirbharta as the ideal path to achieving the ambitious goal of Viksit Bharat by 2047. The short-term objective is to blunt the impact of US President Donald Trump’s punitive tariffs, which are hurting Indian exporters. The PM has noted that items of foreign origin have ‘unwittingly’ become a part of our daily lives. However, these videshi goods have neither entered our markets and homes overnight nor will they vanish anytime soon. India must be prepared for the long haul in order to reduce imports and boost exports.

Among the biggest impediments for India on the trade front is its overwhelming dependence on Chinese goods. The bilateral trade has grown steadily over the years — even during the prolonged Ladakh standoff — but the scales remain heavily tilted in Beijing’s favour. India’s trade deficit has risen from $1.1 billion in 2003-04 to $99.2 billion in 2024-25. The recent thaw offers Delhi an opportunity to reverse the tide, but it won’t be easy to persuade Beijing to step up imports from India. Transactional to the core, China might resist any attempt to significantly reduce the trade gap. Despite Trump’s tariff onslaught, India must not lose sight of the fact that it enjoys a trade surplus with the US, which is also its largest business partner. It’s imperative to keep the trade talks on track so that a mutually beneficial pact can be worked out.

The PM has wisely stopped short of equating self-reliance with protectionism. A review of the existing production-linked incentive schemes is a must to assess their capacity to boost domestic manufacturing. Strict quality standards should be the norm for products supplied to domestic as well as foreign markets. Improving ease of doing business holds the key to showcasing India as a major investment destination. It’s a tough task that will test the Modi government’s mettle, especially with fellow Asian nations like Vietnam and Cambodia offering stiff competition in the manufacturing sector.