Taking forward the government’s agenda of cutting down imports in sectors where there is domestic capacity to expand production, Commerce and Industry Minister Piyush Goyal met a number of industry associations on Thursday to discuss ways to increase localisation of auto components and reduce imports.

“Held meetings with representatives from various industry associations and chambers of commerce along with government officials. Discussed ways to reduce imports in the automobile industry and increase localisation of auto components to promote Make in India,” Goyal said in a tweet.

The China factor

India imported auto components worth $17.6 billion in 2018-19 and more than a fourth of this was sourced from China. Major components that are imported include drive transmission and steering parts, electronic and electrical items, cooling systems, suspension and braking parts.

India’s attempt to reduce non-essential imports is also aimed at checking imports from China and bringing down the high trade deficit with the country.

India’s trade deficit with China in 2019-20 was $48.66 billion. While the deficit declined compared to the previous two years, there has simultaneously been an increase in imports from Hong Kong.

As many as 327 products ranging from mobile phones and telecom equipment to cameras, solar panels, air-conditioners and penicillin can be alternatively sourced or manufactured in India, according to a recent paper by Research and Information System for Developing Countries (RIS), a Delhi-based think tank.

The Commerce & Industry Ministry is examining various options including raising tariffs and putting in place non-tariff barriers, such as higher quality standards and import licensing, to check imports of non-essentials.

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