India's manufacturing sector is becoming more self-sufficient. A Bank of Baroda research report released on Saturday found that import dependence is falling in several key sectors, including electricals, chemicals, capital goods, and consumer durables, even as global supply chains face pressure from the West Asia crisis.
The study analysed 1,372 non-financial companies and found India's overall import-to-net-sales ratio stood at 22.3 per cent in FY25, compared with 22.9 per cent in FY19. While this headline figure is largely flat, sector-level data tells a different story. The report noted that "sector specific ratio has fallen especially where import dependency is higher."
Electricals show sharpest gains
The electricals sector recorded the steepest improvement. The import-to-net-sales ratio fell sharply to 13.7 per cent in FY25 from 22.7 per cent in FY19. Within that sector, cable import intensity dropped to 12.5 per cent from 21.8 per cent over the same period, while electronic components fell substantially from 31.5 per cent to 25.8 per cent in FY25.
Chemicals and carbon black
The chemicals sector also showed measurable progress. The import-to-net-sales ratio fell to 22.5 per cent in FY25 from 27.5 per cent in FY19. The biggest win came in carbon black, falling from an import-to-net-sales ratio of 55 per cent in FY19 to 35.6 per cent in FY25. Carbon black is used in tyre manufacturing, plastics, electronics, and batteries.
Policy driving the shift
Bank of Baroda attributed the trend to targeted government measures, citing "programmes such as Make in India, India Semiconductor Mission 2.0, expansion of the Electronics Components Manufacturing Scheme, development of Rare Earth Corridors and establishment of Chemical Parks." The bank said the decline in import dependence across key manufacturing sectors could help cushion the economy from external commodity shocks.
The timing matters. International crude oil prices have risen 31.1 per cent since the start of the West Asia crisis on February 27, and several industrial metals have also recorded gains. But the report found that the risks are not universal: import intensity "is concentrated in certain sectors," and consumer-oriented sectors like domestic appliances, healthcare, FMCG, and agriculture remain relatively insulated.
Some sectors still need watching. Industrial gases and fuels, non-ferrous metals, crude oil and gas transmission continue to remain highly import-dependent and will require close monitoring amid volatility in global commodity markets.