Union Minister Nitin Gadkari on Thursday asked automobile manufacturers to increase localisation of components to 100 percent or else the government will consider raising basic customs duty on imports in order to encourage domestic manufacturing of such parts.
Speaking at an event organised by the Automotive Components Manufacturers Association of India (ACMA), the Minister of Road Transport and Highways said the present levels of localisation of parts in the Indian auto sector is around 70 percent and "at any cost we need to stop imports of auto components".
"I urge both vehicle and auto component manufacturers to increase localisation of components to the maximum. Not maximum, my expectation is to make it 100 per cent. We are fully competent in all the things. Even, I am requesting automobile manufacturing companies to take it very seriously otherwise for imports of components we will think in the direction to increase more customs duty on that," he said.
Stating that the Indian component manufacturers are fully competent and should be given chance to fully supply the required parts, Gadkari said,"Presently my request to all of you is that at any cost we need to stop imports of auto components...This is the time for the Indian auto industry to support Make in India and Made in India movement."
Reiterating that the auto sector is a key driver of the Indian economy and top contributor among the manufacturing sector, the minister asserted that increase in basic customs duty on select auto components will encourage local manufacturing of such items.
"The government has always had a clear policy that we want to encourage Make in India and Made in India."
Gadkari said whenever he had a chance to interact with the automobile manufacturing companies, his suggestion to them has always been to not to give encouragement to imports.
The minister said the auto industry needs to make qualitative alternatives for imports by which the demand in Indian market can be fulfilled at a reasonable cost.
"You may be aware that the auto component industry is considered as one of the shining sectors and among the champions to achieve the goal of Aatmanirbhar Bharat and Make in India. It is because of strong capability of the component sector that the vehicle industry in India has been able to achieve localisation of around 70 per cent," the minister said.
Asking the manufacturers to focus on reducing cost without compromising quality to supply components of international standards, Gadkari said, the government is working towards making the country a global automobile manufacturing hub in the next five years and it is going to declare the whole policy.
The minister also said with the proposed voluntary vehicles scrappage policy, the availability of raw materials such as steel, plastics, rubber, copper and aluminum among others will also increase, which the manufacturers should take advantage of.(With PTI inputs)