Building Atmanirbhar Bharat: Key Sectors & Steps

Reducing India's Dependency on China and the US: Strategic Sectors and Actionable Steps

India stands at a pivotal juncture in its economic evolution. As global geopolitics shift and supply chains become increasingly weaponized, reducing dependency on dominant powers like China and the United States is not just a strategic imperative—it’s a national necessity. This article explores the sectors where India is most vulnerable and outlines a comprehensive roadmap to achieve self-reliance and strategic autonomy.

🔍 Why Reducing Dependency Matters

India’s trade deficit with China alone reached a staggering $99.2 billion in FY 2024-25, with Chinese imports dominating critical sectors such as electronics, pharmaceuticals, solar energy, and consumer goods.

Meanwhile, reliance on the US for technology, defense, and financial services creates vulnerabilities in policy alignment and economic resilience.

Reducing dependency is not about isolationism—it’s about strategic de-risking, economic diversification, and building indigenous capacity.

🏭 Key Sectors of Vulnerability

1. Electronics and Semiconductors

• Dependency: Over 80% of India’s laptops and flat panel displays are imported from China.

• Challenge: Lack of domestic chip fabrication units and R&D infrastructure.

2. Pharmaceuticals and APIs

• Dependency: 70% of Active Pharmaceutical Ingredients (APIs) are sourced from China.

• Challenge: Cost competitiveness and scale of Chinese chemical manufacturing.

3. Renewable Energy

• Dependency: 82.7% of solar cells and 75% of lithium-ion batteries are imported from China.

• Challenge: Limited domestic production of polysilicon, wafers, and rare earth minerals.

4. Defense and Aerospace

• Dependency: High reliance on US-origin platforms and technologies.

• Challenge: Limited indigenous design and manufacturing capabilities.

5. Technology and Digital Infrastructure

• Dependency: US-based cloud services, software ecosystems, and social media platforms dominate.

• Challenge: Data sovereignty and cybersecurity risks.

🛠️ Strategic Steps to Reduce Dependency

1. Boost Domestic Manufacturing via PLI Schemes

The Production-Linked Incentive (PLI) schemes have already been rolled out across 14 sectors, including electronics, solar modules, and pharmaceuticals. Expanding these schemes with:

• Higher budget allocations

• Faster disbursement mechanisms

• Incentives for MSMEs and startups will accelerate domestic capacity and reduce import reliance.

2. Develop Semiconductor Ecosystem

India must:

• Establish fab units through public-private partnerships

• Invest in chip design and packaging

• Create a semiconductor mission fund to attract global players

• Collaborate with nations like Japan, Taiwan, and South Korea for tech transfer

3. Strengthen API and Bulk Drug Parks

To reduce pharmaceutical dependency:

• Operationalize the three bulk drug parks announced by the government

• Provide tax incentives for domestic API production

• Encourage backward integration in pharma companies

4. Accelerate Renewable Energy Independence

India should:

• Invest in domestic polysilicon and wafer manufacturing

• Promote battery recycling and rare earth mineral processing

• Encourage R&D in alternative solar technologies like perovskite cells

5. Build Indigenous Defense Capabilities

• Expand the Make in India – Defense initiative

• Encourage joint ventures with friendly nations

• Invest in DRDO-led innovation hubs

• Promote private sector participation in aerospace and UAVs

6. Digital Sovereignty and Tech Independence

• Develop Indian cloud infrastructure and incentivize local data centers

• Promote open-source alternatives to proprietary software

• Enforce data localization laws

• Support AI and quantum computing startups

7. Diversify Trade Partnerships

India must reduce over-reliance on any single country by:

• Strengthening ties with ASEAN, EU, Africa, and Latin America

• Pursuing Free Trade Agreements (FTAs) with strategic partners

• Promoting friend-shoring and nearshoring strategies

📈 Policy Reforms to Enable Self-Reliance

A. Ease of Doing Business

• Simplify compliance and reduce red tape

• Digitize approvals and licensing

• Ensure faster land acquisition and environmental clearances

B. Skill Development

• Align Skill India programs with industry needs

• Promote vocational training in electronics, pharma, and renewable sectors

• Encourage industry-academia collaboration

C. Innovation and R&D

• Increase public R&D spending to 1% of GDP

• Create sector-specific innovation clusters

• Offer tax breaks for R&D investments

D. Infrastructure Development

• Build industrial corridors, logistics parks, and smart ports

• Improve power reliability and digital connectivity

• Expand rail and road networks to reduce logistics costs

🌐 Geopolitical Strategy: Balancing Global Ties

India must walk a fine line between strategic autonomy and global cooperation. Key steps include:

• Strengthening Quad partnerships without overdependence

• Engaging in multilateral forums like BRICS, SCO, and G20

• Using economic diplomacy to attract investment and technology

💡 Case Studies of Progress

🔹 Tata Electronics is investing ₹27,000 crore in Tamil Nadu to build a semiconductor plant.

🔹 Reliance Industries is developing India’s first integrated solar giga factory.

🔹 Biocon and Sun Pharma are expanding API production to reduce Chinese imports.

These examples show that India’s private sector is ready—what’s needed is sustained policy support and strategic vision.

🧭 The Road to Atmanirbharta

Reducing dependency on China and the US is not a one-year goal—it’s a decade-long mission. It requires:

• Visionary leadership

• Cohesive policy execution

• Public-private synergy

• Citizen participation

"India’s journey toward Atmanirbhar Bharat is not just about economic self-reliance—it’s about reclaiming strategic control, fostering innovation, and securing a resilient future."

Many Industry leaders are calling this new H-1B visa fee a self-inflicted wound for the U.S. Here's why it's being seen as a potential disaster:

🧠 Innovation Ecosystem at Risk

• The U.S. has long relied on high-skilled foreign talent—especially from India—to power its tech sector.

• The $100,000 fee could choke off access to engineers, data scientists, and AI researchers who fuel innovation in Silicon Valley and beyond.

• NASSCOM warns this could undermine America’s leadership in frontier technologies like artificial intelligence.

💼 Impact on U.S. Businesses

• Companies like Amazon, Microsoft, Google, and Meta are among the top sponsors of H-1B visas.

• These firms now face higher costs and fewer options to fill critical roles, especially in areas where domestic talent is scarce.

• The abrupt one-day implementation deadline created chaos, forcing firms to scramble and even recall employees from abroad.

📉 Economic Ripple Effects

• The move could slow down project delivery, especially for U.S. clients relying on Indian IT firms for onshore work.

• American Depository Receipts (ADRs) of Infosys and Wipro dropped nearly 4% in anticipation of the disruption.

• Reduced access to talent may lead to slower growth, fewer startups, and less global competitiveness.

🎓 Student & Talent Pipeline Disrupted

• Many H-1B holders start as international students—this fee could discourage them from studying in the U.S.

• That means fewer future entrepreneurs, researchers, and tech leaders choosing America as their launchpad.

🧩 Policy Misfire?

• The administration claims the fee will curb abuse and protect American jobs.

• But critics argue it’s a blunt instrument that punishes legitimate employers and shrinks the talent pool at a time when the U.S. needs it most.

This isn’t just about visas—it’s about whether the U.S. wants to remain the global hub for innovation.

1. What is the H-1B visa?
   A U.S. non-immigrant visa for skilled workers in specialty occupations.

2. Who qualifies for an H-1B visa?
   Professionals with specialized knowledge and at least a bachelor’s degree.

3. Which industries use H-1B most?
   IT, engineering, finance, healthcare, and academia.

4. How long is an H-1B visa valid?
   Initially 3 years, extendable to 6 years.

5. Can H-1B visa holders apply for a green card?
   Yes, many transition to permanent residency via employer sponsorship.

6. Which country receives the most H-1B visas?
   India—over 70% of all H-1B visas.

7. Why are Indian IT firms affected most?
   They rely heavily on H-1B to serve U.S. clients with on-site talent.

8. How does the new fee impact Indian professionals?
   It creates a financial barrier, especially for early-career applicants.

9. What is the new H-1B fee?
   $100,000 per visa charges one time fee for workers outside the U.S.

10. When does the H1 B visa fee take effect?
    September 21, 2025

11. Who introduced the fee?
    The Trump administration

12. Does the fee apply to renewals or transfers?
    No, only to new petitions for workers outside the U.S.

13. Are any exemptions available?
    Yes, if the Secretary of Homeland Security deems it in the national interest

14. How long will the fee be in place?
    Initially for 12 months, subject to review and extension

15. How does this affect U.S. companies?
    Higher costs, talent shortages, and project delays.

16. Which U.S. firms are most impacted?
    Amazon, Google, Microsoft, Meta—top H-1B sponsors

17. Will this hurt U.S. innovation?
    Likely yes—reduced access to global talent in AI, tech, and research.

18. What’s the risk to startups?
    Fewer skilled hires, slower growth, and reduced competitiveness.

19. How are families affected?
    Visa holders abroad may be stranded, splitting families

20. What about international students?
    Many may skip U.S. education due to uncertain career pathways.

21. Can the fee be legally challenged?
    Yes, lawsuits are expected from affected companies and advocacy groups

22. Why did the U.S. make this change?
    To curb perceived abuse and protect American jobs

23. Is this seen as a policy misstep?
    Many experts say yes—it harms both U.S. and global stakeholders.

24. How are Indian firms responding?
    Exploring nearshoring, remote work, and alternative markets.

25. Could other countries benefit?
    Absolutely—Canada, UK, and Australia may attract displaced talent.

A breakdown of H-1B visa usage by country over the past 25 years, focusing on the top contributors in terms of number of visas issued and percentage share:

📌 These figures are estimates based on historical USCIS data and immigration trends. India has consistently accounted for more than half of all H-1B visas issued annually, with some years reaching over 70% of total approvals.