India’s Import Dependence Extends Beyond Oil To Electronics, Fertilisers

India’s dependence on imports is emerging as a bigger economic risk as geopolitical tensions and trade restrictions threaten global supply chains. High reliance on overseas supplies can not only widen the trade deficit but also disrupt critical economic activities if key products become expensive or difficult to source.

In its latest Quickonomics report, Crisil Intelligence assessed import dependence across major sectors of the Indian economy using the National Statistics Office’s Supply Use Tables for 2023-24. The analysis found that mining and manufacturing have the highest import dependence among major sectors, while agriculture, construction, utilities and services remain relatively less exposed.

The report comes against the backdrop of continuing tensions in West Asia, which have pushed up commodity prices and raised concerns over the availability of critical supplies.

Oil, Industrial Inputs Drive Import Risk

Energy remains India’s biggest import vulnerability, with 85–90% of domestic crude oil requirements met through imports, according to CRISIL. Natural gas is another major exposure, with imports accounting for 66.1% of domestic supply. Copper ore has an import dependence of 68.8%.

Within manufacturing, the bigger vulnerability lies in industrial inputs and capital equipment rather than finished goods. Import dependence stands at 36.9% for electrical cables and wires, 36.5% for organic chemicals, 29.7% for batteries and 23.9% for plastic products.

Electronics and pharmaceuticals are among the sectors most exposed to imported inputs. By comparison, finished products such as clothing, automobiles and processed food have relatively lower import dependence.

Electronics, Fertilisers Add To Vulnerability

India is relatively self-sufficient in several food categories, with only 1.9% of total agricultural and allied supply imported. However, edible oil remains a major weakness, with imports accounting for 56.2% of domestic consumption in fiscal 2024. Fertiliser import dependence stands at 31.3%.

Strategic industries also face significant external dependence. NITI Aayog estimates India’s semiconductor dependence at 90–95%, while government estimates put dependence on rare earth permanent magnets at 60–80%.

Crisil said electronics now rank among India’s three most import-dependent sectors, driven largely by electronic components. Although government schemes such as PLI have helped increase domestic mobile phone production, domestic value addition remains around 20%, leaving the industry dependent on imported components.

The report said India needs to diversify import sources, strengthen strategic reserves, particularly for energy, and expand domestic production where feasible. Rising geopolitical tensions and growing trade protectionism mean import dependence is no longer merely a trade issue but a potential source of simultaneous growth and inflation shocks.