Representatives of the automotive industry recently met the Union Minister of Trade and Industry and Railways Piyush Goyal to discuss a roadmap to improve localization by reducing imports and increasing exports, based on the campaign of Prime Minister Narendra Modi’s Atmanirbhar Bharat. Goyal claimed this on the occasion of the 60th annual convention of the Society of Indian Automobile Manufacturers (SIAM).
According to Pawan Goenka, Managing Director of Mahindra & Mahindra Ltd (M&M) said that “in the sense of the Atmanirbhar campaign, Bharat’s Prime Minister said that, loud and clear about this campaign, we must commit ourselves and reduce imports and help increase exports, i.e. invest more in R&D and create more jobs.” He also added that most of the car companies are importing Rs 1 lakh crore value from the imports of components that will have to be reduced over the next four to five years.
To reduce imports to that degree, we have reduced the differences in productivity, technology, costs, and capabilities as stated by Goenka. With this, he also said that it is being reduced in automotive electronics and auto-grade steel, which are the two main areas of production, costing about $2.5 billion each. India will not be able to match the cost reduction in the electronic components like China and other ASEAN countries. But given the combined demand for such parts from all industries, such as energy and telecommunications, consumer electronics, and automotive, are the industries that have the potential to provide a large scale of manufacturing in India.
“To achieve its government, it must need some hand holdings that have lasted 2-3 years, so that these companies can compete on their own with their neighbours,” according to Goenka. These imports are due to local non-availability of certain grades of steel, so the Goenka team will work with stakeholders and the steel industry to minimize steel imports by trimming away overseas purchases. In the meantime, Minister Goyal also has given assurances that the government would work with the industry to ensure that they become self-reliant in manufacturing and help increase the global share of exports from India.
Goyal also pointed out that we need to achieve greater size, efficiency, and productivity in these sectors to increase the share of the global chain market. While the president of the Automotive Component Manufacturers Association (Acma), Deepak Jain has told them that the apex auto ancillary body has built a strategy to triple India’s total exports of components to $45 billion over the next five to seven years, to obtain about 4-5 per cent market share in global trade in auto components worth $1.3 trillion.