{"id":101891,"date":"2021-04-17T10:12:07","date_gmt":"2021-04-17T04:42:07","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=101891"},"modified":"2021-04-17T10:12:07","modified_gmt":"2021-04-17T04:42:07","slug":"prospects-of-indias-automotive-industry","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/prospects-of-indias-automotive-industry\/","title":{"rendered":"Prospects of India&#8217;s Automotive industry"},"content":{"rendered":"\n<p><strong>Synopsis<\/strong>: Automotive Industry will help India achieve a $5 trillion economy. A favourable government policy can support the Auto industry to grow by 10-12 per cent per year for the next 10 years.<\/p>\n<h5><strong>Recent developments in India\u2019s automotive industry<\/strong><\/h5>\n<ul>\n<li><strong>Increase in Demand: <\/strong>for example, in the last 3 decades passenger vehicle volume increased 15 times, the SUV 24 times, and the two-wheeler 12 times.<\/li>\n<li><strong>Improvement in Quality and efficiency: <\/strong>The technology features, the safety, the comfort, the emissions, and the energy consumption have improved much better than 3 decades ago.<\/li>\n<li><strong>Developments in supply chain ecosystem<\/strong>:\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>India\u2019s Indigenous supplier base has become globally competitive.<\/li>\n<li>Quality defects have been reduced by 90 percent.<\/li>\n<li>India\u2019s engineering capabilities like their ability to design, engineer, and develop world-class products completely in India, improved a lot.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>This has contributed to the increase in the global rank of the industry from 16th then to 5th now.<\/li>\n<\/ul>\n<h5><strong>Significance of Automotive Industry to India\u2019s economic growth<\/strong><\/h5>\n<ol>\n<li><strong>First, contributes to the development of the MSME sector<\/strong>. For example, The MSME share of value-addition to a car is 35 percent. Further the automotive after market provides economic opportunities to thousands of MSMEs engaged in the auto value chain.<\/li>\n<li><strong>Second, boost to the manufacturing sector.<\/strong> The industry contributes 6.4 percent to GDP and around 35 percent to manufacturing GDP.<\/li>\n<li><strong>Third<\/strong>, <strong>provides employment<\/strong>. It supports over 8 million jobs directly and as many as 30 million more in the value chain.<\/li>\n<li><strong>Fourth<\/strong>, <strong>attracts significant investments<\/strong>. For instance, it has attracted $35 billion over the last 10 years.<\/li>\n<li><strong>Fifth, source of foreign capital. For example, <\/strong>it generates export revenue of $27 billion that is nearly 8 percent of the total merchandise exports from India.<\/li>\n<\/ol>\n<h5><strong>Suggestions to support the growth of the Automotive industry<\/strong><\/h5>\n<p>India\u2019s automotive industry contribution to <a href=\"https:\/\/forumias.com\/blog\/impacts-and-importance-of-gdp-revised-estimates\/\">GDP<\/a> is low compared to countries like Korea, Germany, Thailand, Germany, and Japan. The contribution, there, is more than 10 percent of the country\u2019s GDP. The following measures need to be taken<\/p>\n<ol>\n<li><strong>First<\/strong>, India needs to make a niche for itself in EV tech mobility through rapid localization of EV tech in the production and supply chain.<\/li>\n<li><strong>Second<\/strong>, need to enhance local value addition to invest more in skill development and R&amp;D. It will make it globally competitive in cost, quality, and technology.<\/li>\n<li><strong>Three,<\/strong> to improve exports India needs to sign bilateral treaties to get favorable tariff regimes.<\/li>\n<li><strong>Four,<\/strong> Also, there is a need to rationalize the extremely high GST rates on automobiles in a phase-wise manner.<\/li>\n<li><strong>Five,<\/strong> the <strong>Automotive Mission Plan 2026 <\/strong>released by the government needs to revise in the current context by taking inputs from the industry.<\/li>\n<\/ol>\n<p>If the above steps are implemented with a will, India\u2019s automotive industry will become a $200 billion industry with exports of $50 billion by 2026.<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/indianexpress.com\/article\/opinion\/columns\/indian-it-industry-auto-sector-coronavirus-economy-7275457\/\">Indian Express<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis: Automotive Industry will help India achieve a $5 trillion economy. A favourable government policy can support the Auto industry to grow by 10-12 per cent per year for the next 10 years. Recent developments in India\u2019s automotive industry Increase in Demand: for example, in the last 3 decades passenger vehicle volume increased 15 times,&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/prospects-of-indias-automotive-industry\/\">Continue reading <span class=\"screen-reader-text\">Prospects of India&#8217;s Automotive industry<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[1302],"class_list":["post-101891","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-eco_7","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700787504,"cached_date":1704343479},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/101891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=101891"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/101891\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=101891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=101891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=101891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}