For achieving such target, government support in terms of favourable policies would be crucial, Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta said. Support from the government would not only act as a catalyst for business growth but help the industry become self-reliant as well, he added.
Currently, the Indian auto component industry exports 25 per cent of its production – $ 15.1 bn, with the US and the EU accounting for 65 pc of exports, Mehta said. “The global trade in auto components is $1.3 trillion and the Indian auto component industry has a minuscule share of 1.3 per cent. We should aspire for at least 5 per cent of the global trade share in the next five years. However, for this, government support will be critical,” he noted.
While the industry will have to deliver technologically relevant, globally price-competitive products with consistent quality, the government will have to ensure ease of doing business in its true sense and to overcome disabilities of capital logistics and energy, Mehta said.
“With 9-11 per cent borrowing rate, India has one of highest costs of capital, on logistics, we are disadvantaged by 10-12 per cent and our energy costs need to be globally competitive,” he added.
In 2018-19, the auto component industry’s revenue stood at $57 billion, contributing 2.3 per cent to the country’s gross domestic product. In comparison, turnover of Chinese auto component industry stood at $550 billion last year.
Meanwhile, Maruti Suzuki Chairman RC Bhargava said the answer to calls for boycotting Chinese imports lies in making domestic manufacturing much more competitive, deeper and widespread, but people must remember shunning products from the neighbouring country may lead to them paying more for goods.