“Atmanirbharta,” refers to Prime Minister Narendra Modi’s policy initiative aimed at indigenous development, economic self-reliance and reduced dependency on imports. The upcoming Union Budget is likely to highlight increased efforts for reducing dependence of imported energy, energy and defence equipment.
PUSH FOR DEFENCE
Last year, the budget included a Rs 681,210.27 crore provision for the Ministry of Defence, which was 9.5% more than the allocation in the year earlier. The Federation of Indian Chambers of Commerce and Industry (FICCI), suggests that the capital outlay for the defence ministry should be increased to 30%, from 26% earlier.
India’s external security environment has been embroiled in uncertainty, with rising disputes and conflicts. Moreover, as the country’s adversaries are investing heavily in advanced military technologies, “a strong, modern, and well-resourced defence architecture has thus become critical for safeguarding India’s territorial integrity and preserving strategic autonomy,” FICCI said.
It recommended that allocation for the Defence Research and Development Organisation (DRDO) to be increased by Rs 10,000 crore, aimed at aiding advanced technology for the industry.
“(The) government should consider establishing eastern India defence industrial corridor,” the FICCI report said. It will likely rejuvenate the industrial clusters in the region and spur job creation, stimulate R&D and establish India as a global hub for defence exports. The FICCI suggested that the government considers setting-up a defence export promotion council to coordinate with armed services, their foreign directorates, and private manufacturers among others, as the government aims to reach defence exports worth Rs 50,000 crores by 2028-29.
THE CRITICAL MINERALS STORY
“India needs a focused operational framework to accelerate recovery of critical minerals from tailings,” the report said, adding that an “India Critical Minerals Tailings Recovery Programme” would benefit the country.
India aims to achieve 500 gigawatts of non-fossil fuel capacity by 2030 and net-zero emissions by 2070. These ambitious targets are driving a sharp increase in demand for critical minerals such as nickel, cobalt, rare earth elements, lithium, vanadium, and other strategic resources. While India’s natural reserves of these minerals are limited, the country holds significant potential in the form of critical minerals embedded in mine tailings, overburden, fly ash, red mud, and other mining and industrial waste streams.
Among its recommendations for this industry, FICCI said that dedicated financing with lower interest rates, extended moratoriums and viability gap filling companies injecting capital into sustainable secondary mineral recovery technologies may further support innovation in the sector.
Moreover, dedicated funds to support start-ups and MSMEs (Micro, Small and Medium Enterprises) engaged in mineral recovery from tailings should be established.
FOCUS ON ELECTRONICS MANUFACTURING
To deepen the country’s value chain, the FICCI suggested that the Union Budget unveils the setting-up of a mega electronics industrial park by co-locating original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies, and component suppliers.
The industry body said that to enhance the industry’s growth, a rationalised tariff and a harmonised system code structure should be introduced for printed circuit board assemblies across key applications.
DRONES, GCCs, EXPORTS’ SAFEGUARDING, AGRI-PRODUCTIVITY AND EVERYTHING IN BETWEEN
In a bid to capitalise on the rising demand in the global drones market, FICCI suggested that the Union Budget should include enhanced PLI (Production Linked Incentive) outlay from Rs 120 crores to Rs 1,000 crores for the sector. A Rs 1,000 crore research and development fund should be outlined for supporting indigenous drone designs, AI-enabled autonomy, sensors, propulsion, critical components, and defence-grade subsystems.
The budget is also recommended to include creation of a Rs 1,000 crore fund for common testing, validation, simulation, and certification facilities.
For India’s Global Capacity Centres (GCCs), the infrastructures have become increasingly sophisticated in terms of their high-value innovation, but India has not kept pace with this evolution, FICCI said. “India needs a more contemporary and sector-specific TP framework tailored to GCCs,” the report said.
To safeguard the country from global trade frictions and non-tariff barriers, the industry body said the current Remission of Duties and Taxes on Exported Products (RoDTEP) budgetary allocation of Rs 18,233 crores is inadequate and should be expanded in terms of value and extended in period. While, the inclusion of exports such as iron and steel, which are excluded from the RoDTEP scheme also need attention.
Moreover, the launch of an Export Promotion Mission (EPM) with a total outlay of Rs 25,060 crore spanning for a period of six years as well as the additional Rs 20,000 crore for the Credit Guarantee Scheme for Exporters (CGSE) is recommended by the FICCI.
To revamp growth in the country’s backbone – the agricultural industry – the FICCI suggested launch of reforms including program for development of 3 million farm technicians in five years and a “One Nation, One License” framework for streamlining the agri inputs’ marketing.