Vinod Aggarwal, President of the Society of Indian Automobile Manufacturers (SIAM), said that the current conflict in West Asia is unlikely to have an immediate impact on the auto industry as trade with Israel is minimal.
The Israel-Hamas war has led to a surge in oil prices across the world. However, India's auto sector owing to its limited trade exposure with Israel seems safe so far as long as the fallout is being contained.
“We have not seen any immediate impact. I think our dependence on Israel for trade is not that high. So, there is negligible impact. We have not seen any immediate impact (of the conflict on the domestic automobile industry),” Aggarwal told reporters during a media briefing.
On October 7, the Palestinian terror outfit Hamas launched an unprecedented attack on Israel, killing and taking hostage hundreds of civilians and foreigners. To date, the attack has claimed the lives of about 1,400 people.
In response, Israel has pledged to eliminate Hamas. According to Israel, around half a million residents have relocated from northern Gaza to the southern region as the country prepares for the upcoming phases of its military campaign. India eventually came up with ‘Operation Ajay’ on October 12 to facilitate the return of its citizens following the attack.
When queries if there could be logistics-related issues due to the ongoing conflict, Aggarwal added, “We have to wait and watch. If it escalates, there will be more concern. As of now, there is no concern.”
The Indian automotive industry reported positive performance in the second quarter of the fiscal year 2023-24 with notable growth in several key segments, as revealed by SIAM.
Commenting on the data, Aggarwal emphasised that the passenger vehicle, three-wheeler and commercial vehicle segments continued to show growth in Q2 of 2023-24.
“Passenger vehicle, three-wheelers and commercial vehicle segments continue to witness growth in Q2 of 2023-24. Although two-wheeler wholesale numbers have posted a marginal degrowth compared to Q2 of last year, the retails have been encouraging,” the SIAM president said.
The industry remains optimistic about posting strong numbers in Q3, especially as the festival season approaches.
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