Budget 2027-28 May Back Domestic Manufacturing of 100 Import-Dependent Products
The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has identified 100 products for which India depends heavily on imports.
These products are either not made in India at all or not made in enough quantity. They include intermediates (parts and materials used to make other goods) and capital goods (machines used to make other goods), from sectors like auto components, chemicals and machinery.
The list was prepared after consultations with various ministries and the private sector. The Commerce Ministry will send it to the Finance Ministry as part of its suggestions for the Union Budget 2027-28, likely to be presented on 1 February 2027.
Possible support includes fiscal measures (tax relief, incentives), non-fiscal measures, research and development (R&D) support, trade and tariff measures, and better testing and certification facilities.
The aim is to make these goods in India for both the domestic and the global market, and to reduce import dependence.
Commerce Ministry data for April-September 2026-27 show chemical imports up 10.5% to US$ 16.1 billion, and imports of dyeing, tanning and colouring materials up about 30% to US$ 2.7 billion. Imports of machinery (electrical and non-electrical) rose 15.5% to US$ 34.1 billion, and transport equipment imports rose 9.21% to US$ 18.21 billion.
Union Budget (Annual Financial Statement): How India Plans and Approves Its Money
The Union Budget is the Central Government's yearly plan of how much money it expects to earn and how much it plans to spend. It covers one financial year, from 1 April to 31 March. The Constitution does not use the word "budget". It calls it the Annual Financial Statement, under Article 112. Parliament must approve it before the government can collect taxes or spend money.
The Commerce Ministry plans to send its list of 100 import-dependent products to the Finance Ministry as a pre-budget suggestion. If accepted, the support (tax measures, tariffs, R&D money) will appear in the Budget 2027-28, likely on 1 February 2027, and will need Parliament's approval through the Finance Bill and the Appropriation Bill.
Production Linked Incentive (PLI) Scheme
The Production Linked Incentive (PLI) Scheme is a Government of India plan that gives companies a cash reward for making more goods in India. The reward is a percentage of the extra sales they achieve over a base year. It is meant to attract large factories, cut imports and boost exports. It now covers 14 sectors.
The PLI covers whole sectors. The new list of 100 products goes deeper, to specific intermediates and machines that India still imports. Support for these products in the Budget could take the form of new PLI-style incentives, tariff changes or R&D funding.
Import Substitution Industrialisation (ISI)
Import Substitution Industrialisation (ISI) is a development strategy in which a country tries to make at home the goods it used to import. It usually uses high import duties, quotas and state support to protect young local industries. India followed this approach strongly from the 1950s to 1991. Today's policy talks of "reducing import dependence" in chosen products while staying open to world trade.
The 100-product list is a modern, targeted form of import substitution. Unlike the old ISI model, the aim is also to export these goods, so the products must be globally competitive and not just protected by high tariffs.
- Products identified by DPIIT for domestic manufacturing support: 100
- Sectors include auto components, chemicals and machinery
- Union Budget 2027-28 likely on 1 February 2027
- Chemical imports (April-September 2026-27): US$ 16.1 billion, up 10.5%
- Dyeing/tanning/colouring material imports: US$ 2.7 billion, up about 30%
- Machinery imports (electrical and non-electrical): US$ 34.1 billion, up 15.5%
- Transport equipment imports: US$ 18.21 billion, up 9.21%
- PLI schemes: 14 sectors
- DPIIT is under the Ministry of Commerce and Industry