Govt May Extend Manufacturing Support to 100 Products in FY28

The government may introduce FY28 Budget support for manufacturing 100 import-dependent products, including auto components, chemicals and machinery, through incentives, R&D assistance and infrastructure improvements.

The Indian government is considering additional support measures in the Union Budget 2027–28 to strengthen domestic manufacturing of 100 products across multiple sectors and reduce dependence on imports. The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has completed an exercise to identify products for which India currently relies heavily on overseas suppliers.

The identified products include intermediates and capital goods used across industries, particularly auto components, chemicals and machinery. The exercise follows consultations with various government ministries and private-sector stakeholders to identify goods that are either not manufactured domestically or have insufficient production capacity to meet demand.

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The government aims to expand domestic manufacturing capabilities for both Indian and international markets. The DPIIT is expected to share its recommendations with the Finance Ministry for consideration in the forthcoming Budget. The proposed measures could include fiscal and non-fiscal incentives, research and development support, trade and tariff interventions, and improvements to testing and certification infrastructure.

The initiative comes amid rising imports across several industrial categories. According to Commerce Ministry data, India's chemical imports increase by 10.5% to $16.1 billion during April–September 2026–27. Imports of dyeing, tanning and colouring materials rise by approximately 30% to $2.7 billion during the same period.

Machinery imports also record significant growth. Inbound shipments of electrical and non-electrical machinery increase by 15.5% to $34.1 billion, while transport equipment imports rise by 9.21% to $18.21 billion in the first half of the financial year. These figures highlight the country's continued dependence on overseas suppliers for industrial inputs and equipment.

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The proposed support measures build on existing government initiatives to strengthen domestic production. These include Production Linked Incentive (PLI) schemes covering 14 sectors, the PM GatiShakti National Master Plan, the National Logistics Policy and the Bharat Audyogik Vikas Yojna (BHAVYA).

The Union Budget 2027–28 is expected to be presented on February 1, 2027. Through the proposed manufacturing support, the government seeks to improve industrial capacity, strengthen supply chains, encourage investment and create opportunities for Indian manufacturers to serve domestic and global markets.