On July 16, against the backdrop of escalating geopolitical tensions, Indian Prime Minister Modi has initiated measures to diminish the Indian economy's reliance on critical imported goods. This move is designed to safeguard supply chains and ease the strain on the local currency. Sources within the government reveal that the Indian Ministry of Commerce and Industry is currently compiling a list of over 100 items, encompassing electronics, chemicals, essential pharmaceuticals, fertilizers, semiconductors, automotive components, and mechanical equipment, to foster indigenous production.

This Wednesday, India rolled out its newest endeavor to invigorate domestic manufacturing. Modi's cabinet sanctioned a plan to augment financial backing for chip and smartphone production, allocating up to INR 1.9 trillion (equivalent to roughly USD 19.7 billion). Concurrently, the cabinet also greenlit policies aimed at boosting local fertilizer production, preempting potential fertilizer scarcities that might ensue from the closure of the Strait of Hormuz.

To entice private and foreign investors to set up manufacturing units in India, the government is contemplating offering manufacturing incentives. Additionally, it may mandate state-owned enterprises to augment their production capacities through joint ventures. The government's blueprint includes curtailing fertilizer imports by 30% over the forthcoming three years. To achieve this, it plans to reactivate certain dormant domestic fertilizer plants, with the anticipation that some projects will be finalized within a year.