The Narendra Modi-led government has reportedly ordered 4,000 army shops in India to stop buying imported goods. This decision is sending an unwelcome sign to foreign liquor firms- Pernod Ricard and Diageo.
Recounting the October 19 internal order from the Ministry of Defence, a leading news daily had reported that in the future, “procurement of direct imported items shall not be undertaken.” These “direct imported” items include those which were previously shipped from other countries in their finished forms.
In the liquor segment, Scotch lovers would feel the brunt as they are bottled in Scotland and hence will be banned. Although for those that have their ingredients imported but are then bottled in India will continue to occupy the army canteens shelves.
According to the order the matter was already discussed with the armed forces which include the army, the navy, and the air force in the months of May and July. This, according to the Centre was aimed at supporting Modi’s ‘Vocal for Local’ call and also the Atmanirbhar Bharat Abhiyan- Self-Reliant India Campaign.
Additionally, according to the Manohar Parrikar Institute For Defence Studies and Analyses (ISDA), around 420 items out of the 5,500 items sold in the Canteen Stores Department (CSD) are imported. Moreover, among all the countries, China accounts for a bulk of the imported items. This includes items like electric kettles, sandwich toasters, toilet brushes, ladies’ handbags, and laptops.
If the research column write-up by the government-funded ISDA is to be believed, the ban on selling imported items will not affect the interest of the consumers in any manner whatsoever. Presently the foreign-made items which are being sold via the CSD constitute about 6-7% of the total sales value. Additionally, most of the imported items are luxury items. Hence the use is limited to a few, as according to the research column by ISDA, 97% of the consumers consist of personnel of other ranks and their family members.
Additionally, almost all the items which are imported can be substituted by items made in India. However, the hardest hit would be the companies that sell premium products like imported liquors, consumer durables, and high-end smartphones. Meanwhile, in the month of June, it was also alleged that the foreign liquor brands Pernod and Diageo had briefly stopped receiving orders for their imported brands from government stores.
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