India's Manufacturing Surge: A Path to Reduced Import Dependency

India's manufacturing efforts show promise as import dependency decreases in key sectors like electricals and chemicals, despite global supply chain pressures. A Bank of Baroda report highlights sector-specific reductions in import dependence, attributing improvements to domestic manufacturing policies like Make in India and the India Semiconductor Mission 2.0.

India's strategic push towards enhancing its domestic manufacturing capabilities is showing encouraging signs, as a recent Bank of Baroda report reveals a decline in import dependency across several critical sectors. Areas such as electricals, chemicals, capital goods, and consumer durables are witnessing a shift towards self-reliance, even amidst ongoing global supply chain disruptions linked to the West Asia crisis.

The report highlights that while India's overall import-to-net-sales ratio has remained mostly stable over the years, there is a marked decrease in sector-specific import reliance. It analyzed 1,372 non-financial companies, noting a significant drop in the import-to-net-sales ratio, which stood at 22.3% in FY25, down from 22.9% in FY19.

Electricals, for instance, saw a dramatic reduction in import dependency from 22.7% to 13.7%. The chemicals sector also experienced notable declines, with the import ratio falling from 27.5% to 22.5%. These shifts are attributed to Indian policy measures fostering a more resilient domestic manufacturing ecosystem. Despite challenges from rising commodity prices, the report suggests the impact is not widespread across Indian industries.