The government is working on a production linked incentive scheme (PLI) for automobile manufacturing and components, and also reducing goods and services tax (GST) on batteries for electric vehicles (EVs).

Speaking at the Automotive Component Manufacturers Association of India (ACMA) 60th annual session titled 'Shaping the New Normal', Amitabh Kant, Chief Executive Officer, NITI Aayog said that the government is also at a very 'advanced stage' to finalise on the Scrappage policy for the automobile sector.

"The government is at a very advanced stage for scrappage incentives. They will be meeting soon...we are working on the reduction of GST of batteries to 5 per cent from 18 per cent (on lithium-ion) to promote the electric mobility," Kant said.

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While the electric vehicles attract GST of only 5 per cent, the batteries which are sold separately attract GST of 28 per cent on lead-acid and 18 per cent on lithium-ion battery. The battery of an EV accounts for around 40 per cent of its cost, so the reduction in GST on battery will make the cost of an EV come down significantly.

"India must look at using the first-mover advantage for producing all components for electric vehicles, thus driving towards the path of being a future global leader. The electric vehicles battery prices are set to go below $100, throwing a huge opportunity in the sector to localise. Moreover, we also need to reskill our existing workforce with information related to electronics and digitisation," he said.

He said the auto component industry is a strong representation of Atmanirbhar Bharat and see India's recovery on the back of automobile and component manufacturing.

"The future course requires to focus on local manufacturing and across tier 1, 2 and 3 suppliers as we believe all resources and capabilities are available in India. We need to ramp up R & D to create indigenise technology and therefore reduce imports. There is also a need for new synergies such as with IT industry in the areas of power electronics," he added.

Speaking at the virtual event, Osamu Suzuki, Chairman, Suzuki Motor Corporation said that his companies would like to promote 'Make in India' and Aatma Nirbhar Bharat together and components manufacturers' support will be highly appreciated.

We at Maruti Suzuki, Suzuki Motor Gujarat and Suzuki Motorcycle India will make the best efforts to recover the production and sales in the normal level of before pandemic. Your kind cooperation will be highly appreciated," Suzuki said.

The industry leaders said India is going to be the hub of automobile manufacturing and exports and therefore, the components sector has to work in tandem to meet the growing demand in future.

"The automotive industry is going through a great period of transformation, and in this period it is necessary to have a concrete vision of what a company should be in the next 10-15 years in the future," T Suzuki, President, Suzuki Motor Corporation said.

Speaking at the event, Deepak Jain, President, ACMA said, "We now look forward to the upcoming festive season and the industry to achieve a significant level of normalcy by November. To create a sustainable industry, our auto-component manufacturers will have to gear themselves to the realities of a dynamic and volatile environment and reinvent their business models to deal with the new set of challenges."

 

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