Modi, India's leader, unveils defense system named 'Sudarshan Chakra' and declares tax reductions on Independence Day.
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India is making significant strides in its quest for self-reliance and manufacturing independence, with key developments and initiatives unfolding across various sectors. This push, driven partly by trade tensions with the US and a broader goal of strategic autonomy, is shaping India's economic landscape.
Semiconductor Manufacturing
A major milestone in India's self-reliance journey is the production of its first domestically made semiconductor chip, expected by December 2025. The government's ₹76,000 crore India Semiconductor Mission is supporting this through a production-linked incentive (PLI) scheme and investments in fabrication, assembly, and testing units. The aim is to build a full-stack semiconductor ecosystem, with initial chips using 28nm to 90nm nodes serving key industrial and automotive needs [2][4][5].
Defence and Ammunition
India's armed forces are targeting 100% ammunition self-reliance by the end of 2025, focusing on increasing domestic production capacities and addressing shortages in raw materials. Defence manufacturing has seen record highs, with targets of ₹3 lakh crore production and ₹50,000 crore exports by 2029. Initiatives like the Brahma–BEML Rail Manufacturing Hub for defence and rail products are playing a crucial role [1][3].
Manufacturing Push and Critical Sectors
Initiatives like Make in India and Atmanirbhar Bharat are fostering growth in manufacturing sectors critical for self-reliance and export competitiveness. The government's Production Linked Incentive (PLI) schemes are spurring domestic industries, emphasizing "Zero Defect, Zero Effect" for quality and sustainability. Sectors including fertilizers, jet engines, electric vehicle (EV) batteries, and critical minerals are key focuses to reduce import dependence and build strategic resource capabilities [1][2][3][4][5].
Critical Minerals and EV Batteries Exploration
While specific data on fertilizer, jet engine, and EV battery manufacturing status is limited, these sectors are identified as priority areas under India's broader self-reliance and manufacturing goals, tied to energy security and emerging technologies.
Trade Tensions and Tax Overhaul
Trade tensions with the US have escalated, with Trump imposing an additional 25% tariff on Indian goods. In response, the government has proposed reducing taxes on mass use items, goods used by women, students, and farmers to boost consumption and enhance affordability. However, the government has not made any direct statements about the proposed tax cuts in response to Trump's tariffs [6].
Political Landscape
On India's Independence Day, Prime Minister Narendra Modi announced the creation of a new defense system called 'Sudarshan Chakra', aimed at neutralising enemy infiltrations and enhancing India's offensive capabilities. Modi also emphasized farmers, fishermen, and cattle rearers as top priorities in his speech. Some supporters of Modi have sought to stoke anti-American sentiment and called for a boycott of US companies such as McDonald's, Coca-Cola, Amazon, and Apple [7].
GST Simplification
Modi has promised to cut the Goods and Services Tax (GST) by Diwali, which falls within one of India's biggest shopping seasons. The government aims to make GST a simple tax with two rate slabs, one standard and another merit [8].
Collapsed Trade Talks
Trade talks between New Delhi and Washington collapsed over disagreements on opening India's farm and dairy sectors and stopping Russian oil purchases [9]. As India continues to navigate these challenges, its commitment to self-reliance and manufacturing independence remains steadfast.
[1] India Today [2] The Economic Times [3] The Hindu [4] Livemint [5] Financial Express [6] The Indian Express [7] Business Standard [8] The Times of India [9] Reuters
- Amidst trade tensions with the US, the Indian government has proposed reducing taxes on various items to boost consumption and enhance affordability, as a part of its economic strategy for self-reliance.
- The Indian government's ₹76,000 crore India Semiconductor Mission is supporting the production of domestically made semiconductor chips through a production-linked incentive (PLI) scheme, as part of the country's push towards self-reliance in technology.
- India's armed forces are aiming for 100% ammunition self-reliance by the end of 2025, focusing on increasing domestic production capacities, addressing raw material shortages, and achieving strategic autonomy in defence manufacturing.
- Key developments and initiatives in sectors like semiconductors, defence manufacturing, and critical minerals are unfolding in India, following the government's emphasis on Make in India and Atmanirbhar Bharat programs.
- The Indian government plans to make the Goods and Services Tax (GST) a simple tax with two rate slabs, one standard and another merit, with promises to simplify the system before Diwali.
- In the political landscape, Prime Minister Narendra Modi announced the creation of a new defense system 'Sudarshan Chakra', while some supporters have called for a boycott of US companies, as anti-American sentiment grows amidst ongoing trade tensions and collapsed trade talks.
