India needs strategic recalibration, not indiscriminate protectionism.
Prime Minister Narendra Modi’s appeal to reduce imports of non-essential goods may, in retrospect, come to define a deeper shift in India’s economic philosophy giving fresh momentum to the broader vision of Viksit Bharat. His call to save fuel, avoid unnecessary gold purchases, reduce foreign travel, use public transport, support Made-in-India products and revive work-from-home where feasible was not an austerity message. It was a reminder that in a volatile world, import dependence is no longer only an economic issue; it is a question of resilience, foreign exchange discipline and national security. The appeal also reinforces the spirit of Atmanirbhar Bharat, which seeks to build stronger domestic capacities while reducing vulnerabilities arising from excessive external dependence.
For decades, India’s economic model rewarded openness almost by default. Rising imports were often treated as proof of prosperity, while deeper integration with global supply chains was assumed to naturally strengthen domestic industry. But that model of naïve globalisation is now increasingly difficult to sustain. Nearly every major economy is weaponising trade, technology access, subsidies, standards and supply chains to protect domestic interests. US is backing domestic manufacturing through large industrial incentives, Europe is constructing carbon-border trade mechanisms, and China continues to deploy industrial policy at an unmatched scale.
In this environment, India needs strategic recalibration, not indiscriminate protectionism. The numbers explain the urgency. India’s merchandise imports rose to US$775 billion in FY’26, while merchandise exports stood at US$442 billion, creating a merchandise trade deficit of over US$333 billion. Total imports were estimated at US$980 billion. At a time of pressure on the rupee, elevated import costs and rising defence requirements, trade policy can no longer be treated as a narrow commercial matter.
The first area for immediate action should be non-essential imports where high-quality domestic alternatives exist in abundance. Demerit goods such as cigarettes, cigars, cigarillos, smoking tobacco etc should be placed under far tighter scrutiny. India imported about US$116.37 million of tobacco and manufactured tobacco substitutes in 2024. These are discretionary, health-damaging products with limited domestic multiplier value.
The same logic applies to low value-addition consumer goods such as biscuits, wafers, bakery products, chocolates, premium packaged foods, imported cosmetics, garments, and lifestyle products. India imported US$79 million worth of bread, pastry, cakes, biscuits and other bakers’ wares in 2023, even though India exported US$373.4 million of sweet biscuits, waffles and wafers in 2024 — proof that domestic capability is not the constraint. India also imported US$135.9 million of chocolate and cocoa food preparations in 2024, and US$393 million of beauty products, despite a large and fast-growing domestic FMCG and personal care base. These are precisely the categories where import restraint can be implemented. The second area is trade-remedy enforcement. On one side, PM is calling for reduced dependence on avoidable imports. On the other, domestic industry continues to face large-scale dumping across sectors such as steel, chemicals, aluminium products, PVC resins, synthetic fabrics, paper, pharmaceutical intermediates and industrial raw materials.
Between 1991 and 2020, only 5 out of 1,052 DGTR anti-dumping recommendations were rejected — a rejection rate of just 0.5%. But in recent years, rejections rose sharply: 70% in the second half of 2020-21, 59% in 2021-22, 62% in 2022-23, and as high as 81% between November 17 and December 31, 2025. This is not a procedural detail. DGTR recommends duties only after investigating dumping, injury to domestic industry and the causal link between the two. Once injury is established, recommendations should be notified with urgency. Delays weaken domestic manufacturers precisely when they are expected to invest in quality, innovation, employment and capacity creation.
The same data shows that 72% of recent non-imposition cases involved China either as the only or one of the subject countries.
India’s approach is, in fact, more restrained than many major economies. The average duration of anti-dumping duties in India is 6.97 years, compared to 16.26 years in the US, 11.76 years in the EU, 14.77 years in Turkey and a global average excluding India of 11.19 years. Indian exports face 189 anti-dumping duties imposed by other jurisdictions, of which 164 are currently in force.
India has already notified 142 Quality Control Orders covering 721 products, showing that standards can be used to protect quality and safety without disrupting supply chains. The next step must be sharper: restrict non-essential imports, move avoidable goods from the Open General Licence list to the restricted list where required, and immediately notify DGTR recommendations where injury has been proven. Modi’s message is clear.
India cannot become a serious industrial power while remaining structurally dependent on imports it does not need.
What is emerging instead is a more selective economic doctrine: openness where necessary, intervention where distortion exists and protection where domestic capability carries strategic value.
Rajesh Mehta is an International Affairs expert working on areas like Market Entry, Innovation & Public Policy.
