Large listed cos cut imports bill by locally sourcing parts, raw material

KOLKATA: The government's strong thrust on localising production and sourcing to curb costly imports and foster a domestic manufacturing ecosystem is starting to bear fruit. An ET study of 20 large publicly-listed consumer-facing companies across automobiles, electronics and fast-moving consumer goods (FMCG) showed their foreign exchange outflows as a percentage of sales markedly declined in five fiscal years through FY25, largely driven by lower imports of components and raw materials.

The drop was the sharpest in automobile and electronics manufacturers such as Maruti Suzuki, Tata Motors, Hero MotoCorp, Bajaj Electricals, Whirlpool, Havells, Blue Star, Amber Enterprises and Crompton Greaves Consumer Electricals.

While the share of import bills in sales halved for several companies, for some, it even dropped manifold, show latest disclosures in annual reports.

At Dixon Technologies, the largest homegrown consumer electronic contract manufacturer, the share of imports to total sales plunged to 6% in FY25 from 49% in FY20. The import bill for goods fell 28% year-on-year in FY25 to Rs 2,418 crore.

Dixon has moved to locally procure high-value parts such as TV panels, camera modules and compressors. “Local value addition due to production linked incentive (PLI) schemes has gone up from 40-45% to 65-70% in the last five years in categories such as ACs and LED lighting,” said chairman Sunil Vachani. “A lot of big companies have set up shop. We now expect a similar result in mobile phones and laptops, with the government’s upcoming electronics component manufacturing scheme.”

The Modi government had in the last five years rolled out several PLI schemes.

Electronics and Auto Components
These are aimed at boosting local manufacturing of mobile phones, white goods and ACs, auto and auto components, solar PV modules, food processing and IT hardware, among others, to reduce finished product imports, enhance local value addition, attract investments and spur job creation.

The government has also raised import duties on several components and raw materials, while other non-tariff barriers — such as compulsory certification of factories in India and abroad by the Bureau of Indian Standards — have been implemented to control imports.

For India’s largest car maker, Maruti Suzuki, foreign currency outgo as a percentage of sales nearly halved to 6% in FY25, from 11.5% in FY20. Tata Motors saw the share drop to 1% from 7% in the same period.


Two-wheeler maker Hero MotoCorp’s import bill for components, spare parts, raw materials and capital goods during FY25 was Rs 1,060 crore, a 10% drop from the year before. In FY20, the bill was at Rs 1,001 crore.

Hero MotoCorp’s sales in the last five fiscal years have expanded by more than 40%, pushing down the percentage share of imports to total sales.

Notably, even FMCG companies such as Nestle, Marico and Britannia have reported a decline in their import bills as a percentage of sales in the last five fiscal years. Biscuit maker Parle Products vice president Mayank Shah attributed it to import substitution and lower prices of imported inputs such as cocoa and flavours.

For multinationals, the foreign exchange outgo not just includes components, spare parts, raw materials and capital goods used for setting up factories, but also royalty, licence fees and dividend payments to foreign shareholders.

ITC Ltd chairman Sanjiv Puri told shareholders at the company’s recent annual general meeting that the expense in foreign exchange is mainly capital expenditure for machinery for the factories being built. “There is hardly any expense in foreign currency for raw materials, and we do not have any royalty payout,” he said.