Auto component industry should aim for 5 pc of global trade in 5 yrs; govt support crucial: ACMA

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.


The Indian auto components industry should look at enhancing exports and target at least 5 per cent of the total global trade, which stands at around US$ 1.3 trillion, in the next five years, according to a top industry executive.

As per reports, for achieving such target, government support in terms of favourable policies would be crucial said, Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta.
Support from the government would not only act as a catalyst for business growth but help the the industry become self-reliant as well, he added.

Currently, the Indian auto component industry exports 25 per cent of its production – US$ 15.1 billion, with the US and the EU accounting for 65 per cent of exports, Mehta said.

“The global trade in auto components is US$ 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.

The industry and the government will need to commit to each other to be ‘atma-nirbhar’, he said.

In 2018-19, the Indian auto component industry’s revenue stood at US$D 57 billion, contributing 2.3 per cent to the country’s gross domestic product.

In comparison, turnover of Chinese auto component industry stood at US$ 550 billion last year.


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