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Neha Kaushik

New Delhi , Nov. 25

IN a bid to become globally competitive and encourage investment in the auto component sector, the domestic auto components industry has recommended in its pre-budget memorandum to the Government that three domestic special economic zones (SEZs) be set up in the country.

The zones should be set up in the north, west and southern India clustering around the major automotive manufacturing hubs.

"The need for such SEZs has assumed significance in the context of negotiation of Free Trade & Multilateral Trade Agreements with various countries by the Indian Government", Mr T.K. Balaji, Chief Executive and Managing Director, Lucas TVS, and Chairman - Economic Affairs and WTO, Automotive Component Manufacturers Association (ACMA), said.

Sale of products from the SEZs should be allowed to both the domestic and export markets.

According to ACMA, the setting up of the SEZs would provide the industry with the necessary base to manufacture in India and supply to the entire ASEAN with the help of the various FTAs.

Further, large-sized investments could be attracted into these SEZs for global as well as domestic markets.

Further, in view of the coming FTAs with Thailand and other countries, the ACMA has asked for a level playing field with its counterparts in these countries in the form of higher duties on raw materials.

"The duty applicable on major raw materials such as steel, aluminium, copper, etc. is ranging from 5-15 per cent in Thailand while the customs duty on most of these raw materials in India is 25 per cent.

The Indian auto component industry is at a disadvantage, thus making them uncompetitive vis-vis the Thai industry in a free trade environment", Mr K.V. Shetty, President, ACMA, and Managing Director, IP Rings, said.

Indian auto component manufacturers are estimated to have a 20 per cent cost disadvantage when compared to their Thai counterparts.

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