Earlier this week, Commerce Minister Piyush Goyal pitched strongly for import substitution and urged Indian industry to support domestic supply chains by sourcing locally
| Photo Credit:
Amid the escalating crisis in West Asia, a weakening rupee and concerns over a widening current account deficit (CAD), the Commerce Department is carrying out a trade analysis to identify ways to curb imports, boost domestic manufacturing in sectors with large trade deficits and step up exports where India enjoys a trade surplus.The department has reached out to export promotion councils and industry bodies with product-wise lists under four categories: High trade deficit, high import-negligible export, high trade surplus and high export-negligible import. It is seeking suggestions on measures to reduce import dependence, strengthen domestic production and expand exports.“The government wants to spare no effort in lowering imports wherever possible, in order to conserve foreign exchange. The merchandise trade deficit has been widening and higher global crude oil prices are expected to add further strain. The Commerce Department hopes to come up with suggestions on import substitution and export promotion with the help of industry,” a source tracking the matter told businessline.Rising oil pricesThe exercise assumes significance as Brent crude prices have risen sharply amid fears of supply disruptions in West Asia. India imports more than 85 per cent of its crude oil requirement, making elevated energy prices a major risk for the trade balance, inflation and the rupee. The rupee has also remained under pressure due to volatility in global energy prices and capital flows.In 2025-26, India’s merchandise trade deficit widened to a record $333 billion, up over 17 per cent from the previous year. Economists have cautioned that a prolonged rise in crude prices could push the current account deficit well beyond comfort levels.Strong pitchEarlier this week, Commerce Minister Piyush Goyal pitched strongly for import substitution and urged Indian industry to support domestic supply chains by sourcing locally. He specifically flagged heavy import dependence in segments of the capital goods sector and called upon industrial clusters such as Rajkot, Jalandhar, Ludhiana, Batala and Pune to step up domestic manufacturing.In its communication to export and industry bodies, the department said that for products with high trade deficits, suggestions should focus on reducing imports and strengthening domestic manufacturing capabilities. For items where imports are high but exports negligible, the emphasis is on building production capacity and developing export competitiveness.For products where India enjoys a high trade surplus, the industry has been asked to suggest ways to further expand exports and access new markets. In categories where exports are high and imports negligible, suggestions have been sought on maintaining competitiveness and increasing value addition.Published on May 20, 2026
