Govt may clamp down on import of poor quality auto parts

Amiti Sen Meenakshi Verma Ambwani New Delhi | Updated on September 05, 2013

Commerce Secretary calls for tightening checks at Customs

The Government is considering measures to clamp down on imports of sub-standard automobile components, primarily from China. The move could bring some relief to the domestic industry, which is struggling to cope with competition from cheap imports.

Commerce Secretary S.R. Rao is likely to take up the issue with Revenue Secretary Sumit Bose and ask for tightening of checks and controls at the customs.

“There are concerns that standards of the components being imported are not being checked adequately at the borders. The Commerce Secretary will write to his Revenue counterpart this week asking him to ensure that the Customs Department gets more vigilant and carries out the necessary checks,” a Commerce Department official told Business Line.

The proposed clamp down on imports of auto components could also be seen in the light of the Government’s overall drive to bring down imports to check the widening current account deficit and reduce pressure on the rupee.

The Indian auto component industry, with a reported turnover of about $40 billion in 2012-13, is a fast growing sector but is increasingly facing competition from cheap imports from China and some Asean countries.

Of the $13.1-billion worth of auto parts imported in 2012-13, about 60 per cent originated from Asia, according to the Automotive Component Manufacturers Association of India.

The sub-standard parts allegedly coming in from China are mostly engines and gear boxes, the official said.

“The Indian industry has been adopting global best practices as they are supplying to global Original Equipment Manufacturers (OEMs). The auto components being imported also have to match these,” the official added.

The Indian industry is concerned about the import of Chinese components from both the legal and illegal channels through countries like Thailand with which India has a limited free trading arrangement, pointed out Jayant Davar, co-chairman and Managing Director of Sandhar Technologies, an auto component company, and Chairman CII Northern Region.

“Such components are sub-standard and could prove to be dangerous. It also affects the Indian component industry’s competitiveness as business is lost to cheaper imports,” he said.

Published on September 05, 2013

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