Aim for 5% of world trade in 5 yrs, ACMA tells firms
LOW INCENTIVE High loan interest, electricity rates a challenge for the industry
NEWDELHI: The Indian auto components industry should look at enhancing exports and target at least 5% of the total global trade, which stands at around $1.3 trill i on, i n t he next f i ve years, according to a top industry executive.
For achieving such target, government support in terms of favourable policies would be crucial, Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta said.
Support from the government would not only act as a catalyst for business growth but help the industry become selfreliant as well, he added.
Currently, the Indian auto component industry exports 25% of its production —$15.1 billion, with the US and the EU accounting for 65% of exports, Mehta said.
“The global trade in auto components is $1.3 trillion and the Indian auto component industry has a minuscule share of 1.3%. We should aspire for at l east 5% of t he global t rade share in the next five years. However, for this, government support will be critical,” he noted.
While the industry will have to deliver technologically relevant, globally price competitive products with consistent quality, the government will have to ensure ease of doing business in its true sense and to overcome disabilities of capital logistics and energy, Mehta said.
“With 9-11% borrowing rate, India has one of highest costs of capital, on logistics, we are disadvantaged by 10-12% and our energy costs need to be globally competitive,” he added.
The industry and the government will need to commit to each other to be ‘Atmanirbhar’, he said.
In 2018-19, the Indian auto component industry’s revenue stood at $57 billion, contributing 2. 3% t o t he country’s gross domestic product.
In comparison, turnover of Chinese auto component industry stood at $550 billion last year.
NEW DELHI: Reversing the threemonth selling streak in June, foreign portfolio investors (FPIS) pumped in a net ₹21,235 crore in domestic markets amid increasing liquidity and gradual opening up of the economy.
According to data from depositories, FPIS invested ₹22,893 crore into equities but pulled out ₹Rs 1,658 crore from the debt segment, taking the total net investment to ₹21,235 crore between June 1 and June 26.
Prior to this, foreign investors remained net sellers for three consecutive months. They pulled out a net ₹7,366 crore in May, ₹15,403 crore in April and a record ₹1.1 lakh crore in March.
“FPIS are increasing their investments in small- and midcap stocks that they were already investing in for over a year now,” said Harsh Jain, co-founder and chief operating officer at Groww, said.
India has emerged as the bestperforming equity market in the past three months and this is certainly adding to India’s appeal as an investment destination, he added.
He further said India has done well i n contact- t racing of patients, which is helping open up the economy.
“Currently, the valuations are still compressed and equities are attractively priced, which is a good buying opportunity. With a relatively long-term investment horizon, Indian equities could be a good investment option for FPIS especially once the Covid-19 crisis is resolved and the current market trend reverses,” Himanshu Srivastava, associate director-manager research at Morningstar India, said. In addition to that, increased liquidity in the global markets will also pave its way into the emerging markets, with India also benefiting, Srivastava added.