Govt Puts Pressure On Automobile Companies To Localise Production

New Delhi: The Union Minister for Road Transport is intending to increase customs duty on auto parts in a bid to incentivise local manufacturing.

Nitin Gadkari, while speaking at the annual technology summit of the Automotive Component Manufacturers Association (ACMA), remarked that the auto sector has achieved localisation levels of around 70 per cent under the ‘Atmanirbhar Bharat’ initiative. He highlighted the need to increase the localisation to 100 per cent and said that “at any cost we need to stop imports of auto components”.

The Union Budget has proposed a 15 per cent hike on import duty of components such as drive transmissions, chassis, brakes and steering.

Society of Indian Automobile Manufacturers (SIAM) president Kenichi Ayukawa commented that government support is essential for the localisation of electronic components like semiconductors, which would require huge investments. He stated that while engine transmission and other components have scope for localisation, the automobile sector’s demand in electronics is not sufficient for those industries to localise.

The government is intending to make India a global auto manufacturing hub and is hopeful of increasing demand and availability of raw materials with the new vehicle scrappage policy as well.

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