Auto Inc to cut imports by 50%2 min read . Updated: 05 Sep 2020, 07:26 AM IST
Piyush Goyal says government is willing to engage with the auto industry as frequently as required, with the intent of ensuring self-reliance in local manufacturing and increasing the global share of India’s exports
India’s automotive industry will seek to halve the massive ₹1 trillion worth of components it currently imports annually over the next 4-5 years, a senior industry official said on Friday, in a move aimed at reinforcing the government’s goal to achieve self-reliance.
“To cut down imports at that scale, we need to eliminate gaps in competitiveness, costs, quality, technology and capability," Pawan Goenka, managing director, Mahindra and Mahindra Ltd (M&M), said at the annual conference of the Society of Indian Automobile Manufacturers (Siam).
He cited automotive electronics and auto-grade steel as two key areas of focus for reducing imports.
“We import about $2.5 billion worth of electronics and steel each year," Goenka said.
Stressing that India does not have the scale to match the low prices offered by China and other nations in South-East Asia in electronic parts, Goenka suggested that there is an opportunity to aggregate demand for such parts across sectors comprising automotive, consumer electronics, energy and telecommunications to provide large-scale opportunity to companies to set up manufacturing facilities in India.
“Some hand-holding will be required by the government for a period of 2-3 years before the industry has enough scale to be able to compete on its own with its neighbours," he said.
Speaking at the Siam conference, commerce and industry minister Piyush Goyal said the government is willing to engage with the auto industry as frequently as required, with the intent of ensuring self-reliance in local manufacturing and increasing the global share of India’s exports.
“We need to achieve greater scale, quality and competitiveness in the sunrise sectors and look at increasing our share in the global supply chain," he said.
To cut steel imports, Goenka said the auto industry will have to work with steel industry stakeholders along with the concerned ministry to minimize the need to import.
“In most cases, import of steel happens due to the local non-availability of certain grades of steel," Goenka said.
“Under the clarion call of Atmanirbhar Bharat by the Prime Minister, we commit ourselves to reduce imports, increase exports, invest more in R&D and generate more jobs," he said.
Deepak Jain, president at the Automotive Component Manufacturers Association (Acma), said the industry body of auto ancillary units has drawn up a plan to triple component exports to $45 billion over the next 5-7 years, achieving a market share of 4-5% of global auto components trade of $1.3 trillion during the period.