The Hindu Business Line : Govt bid to make India an automotive hub

THE Government on Wednesday assured domestic and global auto companies all help to make India an automotive hub. "We realise the tremendous opportunities in the auto sector. The Government is committed to taking all steps to encourage auto firms to invest in setting up testing centres and manufacturing plants," the Commerce and Industry Minister, Mr Kamal Nath, said at the Tenth Asia Pacific Automotive Industry Roundtable here. "Much of product design in the future will be happening here," he said. He said that a lot of automobile firms had evinced interest in setting up operations in special economic zones and the Ministry was considering their applications. Replying to a question on the need for infrastructure to keep pace with the the economic growth, he said, the Government had put in place a policy for viability gap funding and had set up a special purpose vehicle for attracting funds. "We need around $150 billion over the next five years," he said. The problem is not about getting the funds, but about structuring them. "Five billion dollars has already come in," he said.

On the constantly cited laggardness of India compared China's speed, he said, "Democracy leads to delay but it also lends an element of transparency." He said the country is still "kind of new" to attracting investments, but "once we get over that hump, we will get going."

The Government will maintain a level playing field for auto companies, both domestic and foreign. Mr Nath said that over the next few days, a Free Trade Agreement would be finalised with the ASEAN block.

Speaking at the summit, Mr Dilip Chenoy, Director General, Society of Indian Automobile Manufacturers (SIAM), said that the next six months would be crucial for the automotive industry. The important developments would be the discussions with ASEAN countries; negotiations at the WTO (it is not yet clear if the automobile industry would figure as a separate vertical at the talks); the response to emission norms and the moves to standardise the industry's validation practices such as certificates issued after vehicle testing. A lot of this work needs to be done because the industry's traditional markets have matured and the action has shifted to regions such as Asia.

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