The Narendra Modi government is considering higher import duties and fiscal incentives to boost domestic manufacturing in a bid to reduce India’s dependence on imports, sources told CNBC-TV18.
According to government sources, the measures could be announced in the upcoming Union Budget 2026 and are aimed at supporting local production while narrowing the merchandise trade deficit. The aim is to de-risk imports of products where India currently relies heavily on a few geographies, especially from single-source supply chains.
CNBC-TV18 has learnt that import duties on select goods, which currently fall in the 7.5% to 10% range, could be raised. Meanwhile, more than 100 items, spanning engineering goods, steel products, machinery and consumer goods, are being considered for incentives.
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The government aims to especially incentivise goods such as umbrellas, spectacles, and agricultural machinery that are highly import-dependent.
These are part of the government’s broader strategy to strengthen domestic supply chains and reduce vulnerability to external factors amid a highly volatile global trade environment.
As of November 2025, India imported merchandise and services worth an estimated $80.63 billion, down 0.6% compared to the same month last year, according to Ministry of Commerce data.
(Edited by : Tenzin Norzom)
