Imported items, including liquor, to be banned in Army canteens
The government is set to ban imported items, including liquor, in the defense canteens as it has ordered its 4,000 military shops to stop purchasing all "direct imported" goods, reported Reuters. These canteens, which sell liquor, electronics, and other products to soldiers, ex-servicemen, and their families at discounted prices, are one of India's largest retail chains with annual sales of more than $2 billion.
Procurement of direct imported items shall not be undertaken: Centre
The Defense Ministry, in its October 19 internal order, reportedly stated that the "procurement of direct imported items shall not be undertaken" for defense canteens in the future. The move, which was discussed with the Army, Air Force, and Navy during May-July, is said to be part of an effort to bolster PM Narendra Modi's Atmanirbhar Bharat Abhiyan that aims to promote domestic manufacturing.
Imported liquor likely on list of items to be banned
While the Ministry's internal order didn't mention which items would be banned, imported liquor is likely to be on the list. Though imported liquor sales at these canteens account only for around $17 million per year, banning it would send a negative signal, especially when the government wants to attract foreign investments, said an executive of a company that sells products at defense stores.
What are 'direct imported' items?
The "direct imported" items include products that are imported from other countries in their finished form. About 420 of the 5,500 items sold by the Canteen Stores Department (CSD) are imported. Interestingly, among other countries, China accounts for most of the imported items sold at the defense canteens such as laptops, electric kettles, sandwich toasters, handbags, and toilet brushes.
Chinese products account for bulk of imported items sale
Imported items account for 6-7% of total sales value in defense canteens, according to government-funded Institute for Defense Studies and Analyses. Chinese products like laptops, vacuum-cleaners, handbags, and diapers make up for the bulk of it. The latest move is in line with India's steps to curb Chinese businesses/investments following the India-China border clash in Ladakh that left 20 Indian soldiers dead in June.
Have received the order, working out the formalities: Senior official
"We have received the order and are working out the formalities. It will take some time to implement," a senior official of the defense canteens told TOI. "Companies that have a high exposure of imported items at army canteens will be the most affected," an industry executive said. Companies selling imported liquor, premium smartphones, and consumer durables are likely to be hit the hardest.
