Auto sector bodies propose incentivising investments in technology development

The presentation showed aspiration of achieving doubling of growth in exports by 2025-26 with the auto component sector hitting $30 billion whereas the vehicle manufacturing segment hitting $19 billion.

PLI Auto sector, ACMA, SIAM, Auto recommendation PLI / March 05, 2021 / 03:38 PM IST

Vehicle manufacturing lobby body Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association of India (ACMA), the body representing auto parts makers, recommended incentivising investments in technology development, R&D and innovation but said the production-linked incentive (PLI) scheme should not cannibalise existing exporters by incentivising new players.

In a presentation at the PLI event organised by Department for Promotion of Industry and Internal Trade (DPIIT) and Niti Aayog, SIAM President Kenichi Ayukawa and CII Manufacturing Council Chairperson Baba Kalyani laid down that PLI scheme is required for the auto sector as it is not sufficiently globally competitive today.

The presentation showed aspiration of achieving doubling of growth in exports by 2025-26 with the auto component sector hitting $30 billion whereas the vehicle manufacturing segment hitting $19 billion.

To push up competitiveness of the auto component sector, the presentation further stated that factor costs likes land, labour, capital, logistics and regulations be reduced. Industrial infrastructure and availability of skilled resources as well as development of high technology automotive clusters be given priority.

The two bodies also recommended incentivise large auto component MNCs (Tier-1s) to establish their mother plants and sourcing hubs in India and make India integral part of their global value chains. Incentivise, encourage and support Indian auto OEMs and auto component companies to develop global scale; create large Indian MNC.

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The "eligibility criterion of this PLI scheme could be moderated to allow larger set of players to benefit in accordance with ACMA recommendations", they said, adding the "base year for eligibility criteria should be FY19-20 instead of FY 18-19 as currently envisaged."
Moneycontrol News
first published: Mar 5, 2021 03:38 pm

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