India Inc’s Import Dependence Stable Despite Global Disruptions: BoB Report

New Delhi, Jul 7 (KNN) India Inc's import dependence has remained broadly stable despite concerns over global supply disruptions, with import intensity concentrated in only a few sectors rather than across the corporate sector, according to a report by Bank of Baroda (BoB).

The report examined the import-to-net sales ratio of a sample of 1,372 companies, excluding banks and financial companies, across various sectors to assess their vulnerability to rising input costs amid the recent West Asia crisis. 

"India Inc's import to net sales ratio has broadly remained flat," the report said, adding that while rising prices of oil and metals have emerged as a key concern for import-dependent industries, the analysis showed no broad-based increase in import intensity across the corporate sector over the years, ANI reported.

Sector-Wise Trends

The report highlighted that several sectors have reduced their dependence on imports over time, providing relief amid the current global environment, with the import-to-net sales ratio declining in chemicals, consumer durables, electricals and capital goods compared with previous years.

However, it noted that certain sectors continue to have elevated import dependence due to the nature of their business and input-output dynamics, with industrial gases and fuels, non-ferrous metals and crude oil reporting higher import-to-net sales ratios because of their operational requirements.

Limited Vulnerability

BoB said import intensity in India Inc is concentrated in a limited number of sectors and companies rather than being broad-based across the corporate sector, meaning any disruption arising from global supply shocks is unlikely to have a widespread impact. 

It added that the impact of such disruptions can be managed through sector-specific policy measures, given that the vulnerability is confined to a few industries rather than affecting the broader economy.

The report noted that the analysis was undertaken against the backdrop of concerns surrounding the West Asia crisis, where rising oil and metal prices have renewed worries over input costs for import-intensive industries. 

While some sectors remain exposed to higher import costs, India's corporate sector as a whole has maintained stable import dependence, reducing the likelihood of broad-based disruptions from global supply shocks, the report said.

(KNN Bureau)