Do You Know How ‘Make in India’ is Aiming to Reduce Import Bills in Key Sectors

In September 2014, the Government of India launched the ambitious ‘Make in India’ initiative, with the primary aim of transforming India into a global manufacturing hub. What began as a visionary step to attract foreign investment and create jobs has now evolved into a strategic economic policy tool to reduce import dependency in key sectors.

India has long been known as a consumption-driven economy, importing everything from crude oil to electronic gadgets, semiconductors, defense equipment, and medical devices. This dependency has often created vulnerabilities: high trade deficits, reliance on global supply chains, and exposure to geopolitical shocks.

But post-2025, the narrative is shifting. India’s policymakers, entrepreneurs, and industrialists are aligning with ‘Make in India’ not just as a slogan, but as a national mission to reduce the import bill while simultaneously boosting exports.

This article explores in detail how ‘Make in India’ is reducing India’s import dependency in critical sectors like defense, energy, electronics, semiconductors, automobiles, renewable energy, and medical devices. With real-world examples, policy measures, and industry success stories, we’ll see how this initiative is positioning India for economic resilience and global competitiveness.

India’s Import Dependence: A Historical Challenge

India’s trade history shows a consistent reliance on imports for essential goods. Despite being the world’s fifth-largest economy, India imports:

• Nearly 85% of its crude oil and petroleum needs.

• Over 60% of electronic goods, including mobile phones, laptops, and chips.

• A significant portion of defense equipment from countries like Russia, the U.S., and France.

• Medical devices and diagnostic equipment, where imports account for more than 70%.

• Solar modules and renewable energy components, mostly from China.

This dependence has led to a large current account deficit (CAD), putting pressure on the rupee and making India vulnerable to global price fluctuations. The need to curb imports and develop domestic manufacturing capabilities is not just an economic choice—it’s a strategic necessity.

The Vision of ‘Make in India’

The core idea of ‘Make in India’ is to:

1. Boost domestic manufacturing capacity.

2. Encourage FDI (Foreign Direct Investment) in high-tech sectors.

3. Support MSMEs and startups to enter global supply chains.

4. Reduce import bills by creating self-reliance in key industries.

5. Turn India into an export-driven economy.

Over the years, the initiative has evolved with sector-specific targets and schemes like PLI (Production-Linked Incentives), Atmanirbhar Bharat, and Digital India.

Let us now look at how it is helping reduce import dependence sector by sector.

Defense Manufacturing: From Importer to Exporter

For decades, India was the world’s second-largest importer of defense equipment. Tanks, aircraft, submarines, and missiles were largely sourced from abroad. This not only drained foreign reserves but also created security risks.

With ‘Make in India’:

• The government has placed over 400 items under a defense import ban, encouraging domestic production.

• Public sector units like HAL (Hindustan Aeronautics Limited) and private firms like Tata Advanced Systems are making fighter aircraft, helicopters, and drones in India.

• The Tejas fighter jet and INS Vikrant aircraft carrier showcase India’s growing indigenous capability.

• Defense exports have surged from ₹1,500 crore in 2016 to ₹21,000 crore in 2024.

By 2030, India aims to become a net exporter of defense equipment, cutting down billions from its import bill.

Electronics & Semiconductors: Breaking the Chinese Monopoly

India’s electronic imports—especially from China—were once a massive burden, costing the country over $65 billion annually.

‘Make in India’ has changed this landscape:

• Global giants like Apple, Samsung, and Foxconn are now assembling and manufacturing in India.

• The PLI scheme for electronics offers financial incentives to companies making mobile phones, laptops, and semiconductors domestically.

• India Semiconductor Mission (ISM) is building large-scale fabrication plants with partnerships from companies like Micron and TSMC.

• By 2025, India is expected to meet 50% of its domestic demand for smartphones through local production.

The long-term goal is to not only reduce imports but also position India as a global semiconductor hub.

Renewable Energy & Solar Manufacturing

India has ambitious plans to achieve 500 GW of renewable energy by 2030. However, until recently, 80% of solar panels and modules were imported from China.

‘Make in India’ is addressing this:

• PLI for solar modules has attracted companies like Reliance and Adani to set up giga-factories.

• Domestic manufacturing capacity is expected to rise from 20 GW in 2022 to 75 GW by 2026.

• India is also investing in battery storage manufacturing to reduce imports of lithium-ion cells.

This shift is expected to save billions in import bills while creating a robust green economy.

Automobiles & Electric Vehicles (EVs)

India is the world’s fourth-largest automobile market, but it depends heavily on imports for EV batteries, semiconductors, and advanced automotive parts.

Through ‘Make in India’:

• The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme promotes domestic EV production.

• Battery giga-factories are being set up to reduce dependency on Chinese imports.

• Global players like Tesla, Ola Electric, and Tata Motors are building integrated supply chains in India.

The EV revolution is expected to cut India’s oil import bills significantly by reducing fuel consumption.

Medical Devices & Pharmaceuticals

India is known as the pharmacy of the world, exporting generic medicines globally. Yet, ironically, it imports 70% of its medical devices and APIs (Active Pharmaceutical Ingredients).

‘Make in India’ aims to fix this gap:

• Special Medical Device Parks are being set up in Himachal Pradesh, Tamil Nadu, and Telangana.

• The government has introduced PLI for API manufacturing to reduce dependence on China.

• Companies like Biocon and Serum Institute are investing heavily in biotech research and production.

This not only reduces the healthcare import bill but also improves India’s resilience in future pandemics.

Crude Oil & Energy Security

India imports over 85% of its crude oil, creating a massive trade imbalance. While reducing oil imports completely is unrealistic, ‘Make in India’ is focusing on:

• Expanding domestic oil exploration under ONGC and private players.

• Promoting biofuels and ethanol blending, which could save billions in fuel imports.

• Encouraging electric mobility and green hydrogen production.

The target is to reduce oil import dependency to 60% by 2035.

MSMEs & Startups: The Backbone of Self-Reliance

MSMEs contribute significantly to India’s imports, especially in machinery and intermediate goods. With deep integration into the ‘Make in India’ program:

• MSMEs are being included in global supply chains through ONDC.

• Startups in drones, AI, and clean energy are replacing imports with indigenous solutions.

• Digital India initiatives are providing MSMEs with the tech backbone to grow.

This grassroots-level transformation is essential for reducing overall import bills.

Challenges in Reducing Import Bills

While progress is evident, challenges remain:

• High initial investment in industries like semiconductors.

• Dependence on rare earth materials from abroad.

• Skill shortages in high-tech sectors.

• Global competition and trade wars.

However, the synergy of government policy, private sector investment, and technological innovation is steadily addressing these issues.

The Road Ahead

By 2030, India envisions itself as a manufacturing powerhouse with significantly reduced import dependency. The import bill reduction will:

• Strengthen the rupee.

• Improve the balance of payments.

• Create millions of jobs.

• Enhance national security.

• Position India as a global leader in sustainable growth.

‘Make in India’ is more than an economic policy—it is a strategic vision for India’s self-reliance and global leadership.

FAQs

Q1. How is ‘Make in India’ helping reduce imports?
By boosting domestic manufacturing in critical sectors like defense, electronics, and energy, reducing the need for foreign goods.

Q2. Which sectors see the highest import substitution under ‘Make in India’?
Defense equipment, semiconductors, renewable energy, medical devices, and EV components.

Q3. How does the PLI scheme support import reduction?
It provides financial incentives to companies manufacturing in India, making domestic production competitive.

Q4. What role do MSMEs play in this mission?
MSMEs contribute to local manufacturing, supply chains, and innovation, directly reducing import dependence.

Q5. Can India completely stop importing goods?
No country is 100% self-reliant. The goal is to reduce critical import dependency while boosting exports.

Conclusion

India’s heavy reliance on imports has long been a structural weakness. But with ‘Make in India’, the country is taking bold steps to reduce this dependency. Whether it is defense, electronics, energy, EVs, or medical devices, domestic production is rising and imports are falling.

The mission is clear: Build in India, reduce imports, and compete globally. As India marches towards becoming a $10 trillion economy by 2035, ‘Make in India’ will play a defining role in rewriting the nation’s economic destiny.

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