GIVE A MOTION TO ‘AUTOMOTIVE MISSION PLAN’

Through its ‘Automotive Mission Plan 2006-16’, the Government of India has a vision to emerge as the destination of choice in the world to design and manufacture of automobiles and automotive components. It also envisions an output reaching a level of US$ 145 billion, accounting for more than 10 per cent of GDP and providing additional employment to 25 million people by 2016. Meanwhile, the Indian automotive industry has emerged as a sunrise sector within a few years of the liberalisation of the country’s economy. It is expected that the next few years will be very crucial for the growth of the automotive industry in India.

A Ministry of Heavy Industries & Public Enterprises study unveils that India is emerging as one of the fastest markets for passenger cars and second-largest for twowheeler manufacturers. It is a home for the largest motorcycle manufacturers and fifthlargest commercial vehicle manufacturers. According to recent statistics, the industry is producing more than 13 lakh passenger vehicles, 4 lakh commercial vehicles and 76 lakh two-wheelers and 3 lakh tractors per annum. The automobile industry has achieved a turnover of US$ 28 billion and the auto component industry has reached a turnover of US$ 10 billion. To maintain this growth rate, the government had set up the Development Council for Automobile and Allied Industry and constituted a taskforce for the same.

The challenge before the taskforce was to give shape and motion to the industry, which has been facing various obstacles. The basic problem in this regard is to put in place a suitable infrastructure and a policy conducive to grow the industry. The infrastructure for logistics operations and recognition to it as an industry, for instance, remains major areas of concern.

It is an undeniable fact that investors from automotive sector would only be attracted to make India their manufacturing hub, if logistics and transaction costs are competitive as compared to other parts of the world.

Moreover, the decision (as announced in the vision document) of having regular dialogue with the industry stakeholders has to be in practice. Proper integration among the ministries involved for automotive logistics for fast clearance of projects as well as shipments will also be urgent tasks before the government.