September 14, 2025

Hold on tight! India's biggest companies in autos, electronics, and FMCG are rocking the boat by cutting down expensive imports in a dramatic fashion. Over the last five years leading up to FY25, their foreign exchange outflow compared to their sales has dropped sharply, thanks to the government's big push on local production and sourcing. This means more 'Made in India' and less money flying out for imported parts and raw materials. The stars of this change are auto and electronics manufacturers including huge names like Maruti Suzuki, Tata Motors, Hero MotoCorp, Bajaj Electricals, Whirlpool, Havells, Blue Star, Amber Enterprises, and Crompton Greaves Consumer Electricals. These companies have shaved off as much as half or more of their import bills compared to sales. Take Dixon Technologies for example—the largest homegrown consumer electronics contract maker. Their import share crashed from a whopping 49% in FY20 to just 6% in FY25! Their import bills also eased by 28% year-on-year to Rs 2,418 crore. How did they do it? They started buying big-ticket parts like TV panels and camera modules locally. As their chairman Sunil Vachani said, "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." He adds there’s more good news on the way with government plans for electronics component manufacturing. The Modi government rolled out several PLI schemes focusing on mobile phones, white goods, ACs, auto parts, solar modules, food processing, and IT hardware. These schemes push companies to make more in India and reduce finished product imports. At the same time, import duties on many components have increased, and rules like mandatory factory certifications by the Bureau of Indian Standards have tightened the screws on imports. Maruti Suzuki halved its foreign currency outflow from 11.5% in FY20 to about 6% in FY25. Tata Motors cut theirs from 7% to just 1% in the same period. Hero MotoCorp’s import bill dipped 10% to Rs 1,060 crore in FY25 while their sales jumped 40%, meaning imports now form a smaller slice of their business pie. Even FMCG giants like Nestle, Marico, and Britannia chipped in with declining import costs. Parle Products’ vice president Mayank Shah credits "import substitution and lower prices of imported inputs such as cocoa and flavours" for this sweet success. For foreign companies, foreign exchange expenses also cover royalties, license fees, and dividends. ITC Ltd’s chairman Sanjiv Puri told shareholders their foreign exchange expense mainly comes from buying machinery for new factories. "There is hardly any expense in foreign currency for raw materials, and we do not have any royalty payout," he clarified. So, India’s big push on local production is not just a slogan—it’s paying off big time! More jobs, more investments, and less money flying abroad. Who says you can’t have your cake and eat it too?

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Tags: Local manufacturing, Import reduction, Pli scheme, Automobile industry, Electronics industry, Foreign exchange outflow,