ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A Survey of Industry

What is the extent of reliance of industry on imports? The answer to this that one comes across is often a business harangue rather than cold calculation. 

What is the extent of reliance of industry on imports? The answer to this that one comes across is often a business harangue rather than cold calculation. Since March 1965 when the Government first deferred the announcement of import policy, industry has been crying wolf — as experience since then shows, without any basis. We have heard too frequently the cry of industry coming to a halt.However, a perusal of published statistics shows that the extent of unused industrial capacity towards the end of 1965 was only about 20 per cent. In fact, even after March 1965, industrial production continued to rise, and the undoubtedly slackening pace of growth (from about plus 3.5 per cent, during the period April 1965 to March 1966 is due more to market factors than to paucity of raw material supplies.

Maintenance Imports 
On a rough calculation it appears that industry needs, on maintenance account, imports of about $800/1,000 million a year. On a total annual industrial production of more than Rs. 4,000 crores, the import requirements amount to about 12 to 15 per cent of total industrial output. However, the extent of reliance varies among industries.Cotton and jute textiles, sugar, cement and paper industries rely only marginally on imports — cotton textiles for raw cotton and chemicals (though a Reserve Bank study, shows how cotton textiles, the oldest and the most developed industry in India, still remains a net consumer of foreign exchange), jute textiles for raw jute, and others mainly for chemicals. Chemical and engineering industries rely to a larger extent on maintenance imports — mainly basic chemicals, basic metals and components.On the other end, industries like phosphatic fertilisers and electrical cables, (winding wires and household cables) rely almost wholly on imports — rock phosphate, sulphur and copper. Caprolactum (for the nylon industry) is wholly imported, and two-thirds of rayon grade pulp is again obtained from imports. Going commodity-wise, the major maintenance import items in India are rock phosphate, sulphur, copper, alloy steels, lead, zinc, basic chemicals (for pharmaceutical and chemical industries) and components (for engineering industries).

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