According to an analysis conducted by industry body PHD Chamber of Commerce and Industry, India holds the immense potential to reduce 40% imports (around USD35 billion) from China in the coming times as there are various product categories in which India also produces but at the lower volume said Shri Pradeep Multani, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
The PHDCCI report on ‘Prospects and Potential for Enhancing Exports and Reducing Imports of India’, (attached) pertains to the comparative analysis of bilateral trade with the largest importer and exporters of India i.e. China and USA, said Shri Pradeep Multani.
The recent dynamic schemes announced by the Government of India such as the PLI scheme and PM Gati Shakti schemes have enhanced the sentiments of the Indian producers to produce more at a competitive cost which will give considerable competition to China, said Shri Pradeep Multani.
In recent years imports from China have increased significantly except the Pandemic year, India has imported around USD 87 billion in the year 2021 wherein the top 10 import product categories comprise around USD 54 billion, said Shri Pradeep Multani.
Imports from China have changed from low-value, low-cost products like toys and crackers to high-value items like electronics, he said.
Unfair competition from imports from China had a severe impact on the growth prospects of domestic manufacturers, especially small businesses, he said.
India has significant scope for producing more import substitution in the sectors including chemicals, automotive components, bicycle parts, agro-based items, handicrafts, drug formulations, cosmetics, consumer electronics, and leather-based goods among others, said Shri Pradeep Multani.
Enhanced production in these sectors will not only reduce imports from China but also boost India’s exports in such product categories, said Shri Pradeep Multani.
There are approximately 36 sub-sectors that can reduce India’s dependence on Chinese imports. These sectors collectively account for around USD35 billion in India’s imports, he said.
Since the domestic market has production capabilities; these sectors can readily minimize their dependence on China in a phased manner without any substantial extra investments, said Shri Pradeep Multani.
In the first phase, India may focus on the sectors that are included in the PLI scheme. The sectors such as electrical and electronic components comprise USD26 billion in India’s imports from China, Whereas, Active Pharmaceutical Ingredients, Machinery and components, plastics, and fertilizers are collectively contributing around USD 30 billion and can be the major exports, said Shri Pradeep Multani.
In the second phase, labour-intensive sectors such as textiles, iron and steel, tanning, dyeing extracts, man-made filaments, furniture, and lighting among others can also be considered for import substitution and export promotion, he said.
Export promotion strategy for 36 sub-sectors would have a positive cascading effect on the economy through forward and backward linkages in the industry production processes, said President, Shri Pradeep Multani.
Annexure : 36 sub-sectors for reducing imports and enhancing exports
| S.No | HS Code 4 Digit | Description | Value in USD billion | % Share in Total Imports from China | % Share in Total Imports from World |
| 1 | 8517 | Telephone sets, incl. telephones for cellular networks or for other wireless networks; other … | 6.6 | 7.5 | 1.2 |
| 2 | 8471 | Automatic data-processing machines and units thereof; magnetic or optical readers, machines … | 6.2 | 7.1 | 1.1 |
| 3 | 8542 | Electronic integrated circuits; parts thereof | 4.5 | 5.2 | 0.8 |
| 4 | 8541 | Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, … | 3.9 | 4.4 | 0.7 |
| 5 | 8529 | Parts suitable for use solely or principally with transmission and reception apparatus for … | 2.2 | 2.6 | 0.4 |
| 6 | 2933 | Heterocyclic compounds with nitrogen hetero-atom[s] only | 1.8 | 2.0 | 0.3 |
| 7 | 3102 | Mineral or chemical nitrogenous fertilisers (excluding those in pellet or similar forms, or … | 1.5 | 1.7 | 0.3 |
| 8 | 2941 | Antibiotics | 1.4 | 1.6 | 0.2 |
| 9 | 8504 | Electrical transformers, static converters, e.g. rectifiers, and inductors; parts thereof | 1.3 | 1.5 | 0.2 |
| 10 | 8507 | Electric accumulators, incl. separators, therefore, whether or not square or rectangular; parts … | 1.2 | 1.4 | 0.2 |
| 11 | 3105 | Mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, … | 1.2 | 1.4 | 0.2 |
| 12 | 8414 | Air or vacuum pumps (excluding gas compound elevators and pneumatic elevators and conveyors); … | 1.1 | 1.2 | 0.2 |
| 13 | 8708 | Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, … | 1.0 | 1.2 | 0.2 |
| 14 | 3808 | Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth … | 0.9 | 1.1 | 0.2 |
| 15 | 2915 | Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides, and peroxyacids; … | 0.8 | 0.9 | 0.1 |
| 16 | 2916 | Unsaturated acyclic monocarboxylic acids, cyclic monocarboxylic acids, their anhydrides, halides, … | 0.8 | 0.9 | 0.1 |
| 17 | 8473 | Parts and accessories (other than covers, carrying cases and the like) are suitable for use solely … | 0.8 | 0.9 | 0.1 |
| 18 | 8518 | Microphones and stands therefore (excluding cordless microphones with built-in transmitter); … | 0.7 | 0.8 | 0.1 |
| 19 | 2922 | Oxygen-function amino-compounds | 0.7 | 0.8 | 0.1 |
| 20 | 2917 | Polycarboxylic acids, their anhydrides, halides, peroxides, and peroxyacids; their halogenated, … | 0.7 | 0.8 | 0.1 |
| 21 | 8479 | Machines and mechanical appliances having individual functions, not specified or included elsewhere … | 0.7 | 0.8 | 0.1 |
| 22 | 3920 | Plates, sheets, film, foil, and strip, of non-cellular plastics, not reinforced, laminated, … | 0.6 | 0.7 | 0.1 |
| 23 | 8431 | Parts suitable for use solely or principally with the machinery of heading 8425 to 8430, n.e.s. | 0.6 | 0.7 | 0.1 |
| 24 | 8525 | Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception … | 0.6 | 0.7 | 0.1 |
| 25 | 2921 | Amine-function compounds | 0.6 | 0.6 | 0.1 |
| 26 | 2934 | Nucleic acids and their salts, whether or not chemically defined; heterocyclic compounds (excluding … | 0.6 | 0.6 | 0.1 |
| 27 | 8482 | Ball or roller bearings (excluding steel balls of heading 7326); parts thereof | 0.6 | 0.6 | 0.1 |
| 28 | 3206 | Inorganic or mineral colouring matter, n.e.s.; preparations based on inorganic or mineral colouring … | 0.5 | 0.6 | 0.1 |
| 29 | 5402 | Synthetic filament yarn, incl. synthetic monofilaments of < 67 decitex (excluding sewing thread … | 0.5 | 0.6 | 0.1 |
| 30 | 8501 | Electric motors and generators (excluding generating sets) | 0.5 | 0.6 | 0.1 |
| 31 | 3904 | Polymers of vinyl chloride or of other halogenated olefins, in primary forms | 0.5 | 0.6 | 0.1 |
| 32 | 8483 | Transmission shafts, incl. camshafts and crankshafts, and cranks; bearing housings and plain … | 0.5 | 0.6 | 0.1 |
| 33 | 9019 | Mechano-therapy appliances; massage apparatus; psychological aptitude-testing apparatus; ozone … | 0.5 | 0.6 | 0.1 |
| 34 | 8714 | Parts and accessories for motorcycles and bicycles and for carriages for disabled persons, … | 0.5 | 0.6 | 0.1 |
| 35 | 8536 | Electrical apparatus for switching or protecting electrical circuits, or for making connections … | 0.5 | 0.6 | 0.1 |
| 36 | 9018 | Instruments and appliances used in medical, surgical, dental, or veterinary sciences, incl. … | 0.5 | 0.5 | 0.1 |
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