Dou­ble De­light

Auto components India - - EDITORIAL - Bhar­gav TS Ex­ec­u­tive Edi­tor s.bhar­gav@nextgen­pub­lish­ing.net

As pre­dicted, mon­soon is bring­ing lots of cheers to some sec­tions of the au­to­mo­tive in­dus­try. The gov­ern­ment is also op­ti­mistic about get­ting the Goods and Ser­vices Tax (GST) Bill through Par­lia­ment by the end of the cur­rent mon­soon ses­sion. If the Bill is passed it will be, along with a good mon­soon, dou­ble de­light to the au­to­mo­tive in­dus­try. GST’s game chang­ing in­di­rect tax re­form and its im­ple­men­ta­tion will have a pos­i­tive im­pact on the in­dus­try in the long-term. GST will be good for the au­to­mo­tive sec­tor mainly ow­ing to the re­moval of the cas­cad­ing ef­fect of tax­a­tion on it. Cur­rently the man­u­fac­tur­ers have to pay 2% Cen­tral Sales Tax (CST) to pro­cure com­po­nents or raw ma­te­ri­als. If GST is im­ple­mented this will not hap­pen.

The op­po­si­tion to GST by States like Tamil Nadu is based on the fear of los­ing rev­enue. Another rea­son is that some States give huge in­cen­tives to in­vestors. These in­cen­tives are based on the Value Added Tax (VAT) and CST that they pay. When GST comes, CST will go. These States will have to carry out their com­mit­ments of in­cen­tives from what they col­lect. They ex­pect the Cen­tre to com­pen­sate.

For the last 1 month every­one has been dis­cussing Brexit and its im­pact on In­dia. It will be too early to com­ment on it as the re­vised UK-EU re­la­tion­ship is yet to be de­fined. Early this month, the Union Com­merce and In­dus­try Minister, Nir­mala Sithara­man, had said In­dia and the UK were ex­plor­ing the pos­si­bil­ity of a free-trade agree­ment. Is it a wel­come move? We have to wait and see.

In this is­sue we have fo­cused on the auto com­po­nents in­dus­try in the South­ern States. With the fu­tur­is­tic and in­vestor-friendly poli­cies, they have made the re­gion the au­to­mo­tive in­dus­try hub of In­dia. Al­most all the global au­to­mo­tive OEMs and com­po­nent man­u­fac­tur­ers have their base in the South. They have ush­ered in the global tech­nolo­gies and in­no­va­tions to the In­dian au­to­mo­tive in­dus­try. The State Governments of Tamil Nadu, Kar­nataka, Andhra Pradesh and the new­ly­formed Te­lan­gana are vy­ing with one another to ex­pand their in­dus­trial base. The lo­gis­tics sup­port from well-con­nected roads and highly com­pe­tent ports are added at­trac­tions for the na­tional and in­ter­na­tional in­vestors who have also ex­port plans.

In our Cover story we have high­lighted some the home-grown and multi­na­tion­als that are trans­form­ing the auto com­po­nent in­dus­try land­scape in the coun­try. We also re­cently visted Rane TRW Steer­ing Systems Vi­ral­i­malai plant near Trichy in Tamil Nadu to know how qual­ity prod­ucts are man­u­fac­tured. It was a de­light­ful watch, hope you will also en­joy read­ing about it in the Shopfloor So­journ.

Wish­ing you happy read­ing.

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