Nitin Gadkari suggests localisation of auto parts or else govt could look at increasing import duty

Nitin Gadkari, Union Minister for Road Transport & MSME was addressing virtually at the annual technology summit of Automotive Component Manufacturers Association (ACMA). He touched upon boosting local manufacturing, scrappage policy and strengthening Make In India.

Union Minister for Road Transport and Micro, Small and Medium Enterprises, Nitin Gadkari said the government could look at hiking custom duty on auto parts to boost local manufacturing to reduce imports and increase localisation to achieve the mission of ‘Atmanirbhar Bharat’.

Gadkari was addressing the annual technology summit of the Automotive Component Manufacturers Association (ACMA), the minister highlighted the need to reduce imports and increase exports, further emphasising on the capabilities of auto industry to come up with goods without compromising quality and cost.

The Budget 2021 has proposed 15% increase in the import duty on automotive components such as drive transmission, chassis, brakes and steering to reduce imports from China and boost local manufacturing.

Gadkari said, “Auto component industry is considered as one of the shining sectors to achieve the goal of Atmanirbhar Bharat and Make in India. It is because of the strong capabilities of the auto sector that the vehicle industry in India has been able to achieve a localisation level of around 70%. I urge both the auto component makers and the OEMs to increase localisation to 100%.”

He also said the domestic auto sector has created employment for more than 5 million people and has the potential to employ over 25 million skilled manpower in the near future.

He also touched upon the scappage policy which is intended to replace 10 million old and unfit vehicles. He added, the government is working actively on framing the final vehicle scrappage policy.

Gadkari said, “The government is also looking at resolving issues related to the shortage of raw materials such as steel to encourage replacement demand and ease production challenges to support the automobile industry.”