India identifies $51bn in critical imports for domestic manufacturing push, sources say

NEW DELHI: India is seeking to push domestic manufacturing for items worth $51 billion in imports, three government sources said, as Prime Minister Narendra Modi seeks to reduce the country’s reliance on overseas suppliers.

The South Asian nation imported $775 billion worth of goods in the 12 months ended March 2026 and an internal government analysis showed that imports worth $398 billion have the potential to be replaced by local manufacturing, the first source said.

Of this, about $51 billion in imports were viewed as critical for the manufacture of items ranging from textiles to solar panels, the source said, adding that about 100 items would be taken up for immediate action.

The three government sources did not want to be identified because the project is confidential. India’s trade ministry did not immediately respond to Reuters’ request for comment.

India’s latest push to boost domestic production comes as it grapples with supply-chain risks heightened by geopolitical tensions. It is also seeking to reduce its dependence on China and narrow its trade deficit.

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The items span sectors from footwear to textiles, electric vehicles and solar panels, one of the sources said.

“The identification is based on the fact that these are critical for economic resilience, cutting reliance on suppliers such as China, and to achieve cost competitiveness through incentives and subsidies,” another government source said.

India has made previous efforts to boost local manufacturing, including its 2014 ‘Make in India’ program and a more recent ‘Production Linked Incentive’ scheme. The efforts paid off in some sectors like mobile phones and consumer electronics but failed to bring down overall imports.

Dependence on China

India’s imports from China stood at nearly $132 billion in the fiscal year 2025/26, the highest among any nation New Delhi buys from, and including inputs and machinery critical to the functioning of India’s factories.

The government found for example that sole moulds for footwear, worth about $483 million in imports last year, take about two weeks to make in India, compared with three to five days in China.

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The government aims to narrow this gap with incentives to attract investment and to encourage joint ventures with firms from Taiwan, South Korea, Germany and Italy, the first source said.

In the renewables sector, $3 billion worth of solar photovoltaic cell imports are weighing on domestic manufacturers as lower-priced Chinese imports undercut prices. The cells could be produced locally, the source said.

The Indian government is encouraging state-owned firms to join the new local production drive, a second government source said.