the government has quietly sought to boost domestic manufacturing of several goods ranging from defence equipment to solar panels and petrochemicals in a bid to create more jobs and reduce dependence on imports while a higher foreign investment ceiling in defence production is expected to result in some manufacturing moving to india for several sectors it meant reducing the import duty on raw materials and inputs while raising the customs tariff on finished products in fact the inverted duty structure which means the finished products face lower duties than raw materials has resulted in a boost to imports making local production uncompetitive and putting pressure on the import bill the problem has been accentuated by the free trade agreements that india has signed with countries such as south korea and japan as well as members of the asean for long indian companies have depended on high import duties to offset the disadvantage caused by high infrastructure and transaction costs in the country there is a third group which includes the green energy where european and american companies have had a headstart but are now under pressure from chinese competitors for instance in case of solar panels chinese companies have driven down costs often backed by state subsidies and driven away western competitors indian companies which were in the business are saddled with debt as the chinese took away market share the existing duty structure incentivizes imports rather than domestic manufacture of solar photovoltaic cells and modules finance minister arun jaitley said as a result the government exempted several inputs used for green energy goods and also reduced the import duty on machinery and equipment used for setting up of a project for solar energy generation similarly there were concessions to promote wind energy and compressed bio gas plants