Industry & Economy
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Automobiles
Auto industry needs innovation to compete globally: Survey
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New Delhi
Feb. 27
India's automobile industry needs a major push to enhance its capabilities to innovate and upgrade to remain competitive in terms of quality and price in the global market, the Economic Survey said on Tuesday.
"The major challenge that the auto industry is presently facing is with respect to its capabilities to innovate and upgrade in order to remain competitive in the international market," it said.
Describing the automotive sector as one of the key segments of the economy, it said the industry manufactured about 53.94 lakh vehicles till September and grew by 18.04 per cent in terms of production.
The automobile industry has grown at a rate of 16 per cent since 2001, and delicensing and relaxed FDI norms have helped it post impressive growth in domestic and overseas markets, it said.
"Automobile exports crossed the $ one billion mark in 2003-04 and increased to $ 2.28 billion in 2005-06.
"The industry exported as much as 17.7 per cent and 16.3 per cent of its domestic production of three-wheelers and passenger cars in the year," the Survey pointed out.
Relaxations provided by the Government to the automobile industry such as reduction of duty on raw materials, the setting up of National Automotive
Testing and R&D Infrastructure Project (NATRIP), and finalisation of Automotive Mission Plan (AMP) would provide a boost to the sector in an enormous way.
The auto components sector's turnover grew to $ 10 billion in 2005-06, up from $3.1 billion in 1997-98.
Its exports also grew by 28 per cent to touch $ 1.8 billion in 2005-06, the Survey said.
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