Automotive Industry Pins Hopes on Interim Budget for Infrastructure Thrust and Policy Support
As Finance Minister Nirmala Sitharaman prepares to present the interim budget, the domestic automotive industry braces itself, anticipating key policy signals and hoping for continued support in crucial areas. While the industry isn’t anticipating groundbreaking reforms in this vote-on-account budget, stakeholders are expressing their collective desire for sustained emphasis on infrastructure development and green initiatives.
The Society of Indian Automobile Manufacturers (SIAM), a prominent voice in the sector, communicates a nuanced perspective. SIAM acknowledges the context of the interim budget but emphasizes the critical role of last-mile connectivity, infrastructure, and policy consistency in propelling the expansion of the automotive sector. Rajesh Menon, Director General of SIAM, states, “The auto industry believes that the interim budget should focus on last-mile connectivity, infrastructure, and policy consistency, which would propel expansion of the sector.”
Shashank Srivastava, Senior Executive Director at Maruti Suzuki, emphasizes the symbiotic relationship between the auto industry’s performance and the country’s overall economic growth. Supporting this sentiment, Swapnesh R. Maru, Deputy Managing Director at TKM, underscores the need for policy stability and a sustained emphasis on spurring investment and infrastructure development. He highlights that such measures would not only enhance the country’s global competitiveness but also foster growth in the manufacturing and service sectors, improve supply chain efficiencies, and generate higher employment, leading to broader social gains.
The Automotive Component Manufacturers’ Association (ACMA), serving as the apex body for the auto component industry, acknowledges the government’s efforts under schemes like PLI (Production Linked Incentive) and FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles). ACMA expresses hope that these initiatives will continue to receive generous budgetary allocations, fostering growth and innovation in the sector.
ATMA Urging Government for Duty Cuts on Raw Materials
Meanwhile, the Automotive Tyre Manufacturers Association (ATMA) is urging the government to consider some duty cuts on raw materials. Additionally, ATMA advocates for the exploration of more Free Trade Agreements (FTAs) to facilitate the sourcing of materials at competitive rates. Anshuman Singhania, Chairman of ATMA, points out specific areas of consideration, stating, “From a raw material point of view, a few more FTAs would allow us to procure those that are not sourced or manufactured in India at competitive rates. In terms of duty correction, natural rubber is one of the areas which can be looked into. GST (on raw materials) is one of the areas that the government can think about. In the automotive value chain, PLI schemes for the tyre industry is an area which the government should consider.”
In the electric vehicle (EV) sector, the Society of Manufacturers of Electric Vehicles (SMEV) envisions a supportive approach from the government that will contribute to uplifting the EV industry over the next decade. Sohinder Gill, Director General of SMEV, outlines specific measures, stating, “Permitting the inclusion of electric vehicles in priority sector lending would lower financial costs, potentially fostering greater adoption of these vehicles. The government could implement measures so that India can create an Atmanirbhar EV ecosystem and also enable technological advancements, particularly in the field of artificial intelligence.”
As the automotive industry eagerly awaits the interim budget, these varied perspectives reflect a collective aspiration for policies that will not only address the immediate concerns of the sector but also set the stage for sustainable and inclusive growth.