{"id":16626,"date":"2018-03-05T15:05:20","date_gmt":"2018-03-05T09:35:20","guid":{"rendered":"http:\/\/blog.forumias.com\/?p=16626"},"modified":"2018-03-05T15:07:25","modified_gmt":"2018-03-05T09:37:25","slug":"new-draft-national-automotive-policy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/new-draft-national-automotive-policy\/","title":{"rendered":"New Draft National Automotive Policy : An analysis"},"content":{"rendered":"<p><strong><u>Context:<\/u><\/strong><\/p>\n<ul>\n<li>Ministry of Heavy Industries and Public Enterprises is working for formulating the National Automotive Policy for holistic development of automobile sector in India.<\/li>\n<\/ul>\n<p><strong><u>Background:<\/u><\/strong><\/p>\n<ul>\n<li>The Government of India and the Indian automotive industry articulated their objectives for the future of the industry through the Automotive Mission Plan 2016-26 (AMP 2026).<\/li>\n<li>The very need of the plan is to <strong>place India among the top three in the world in engineering, manufacturing and export of vehicles and auto components by 2026<\/strong>.<\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>What are the objectives of National Automotive Policy?<\/u><\/strong><\/p>\n<ul>\n<li>The objectives of National Automotive Policy are as follows:<\/li>\n<li>to provide a long-term, stable and consistent policy regime and to have a clear roadmap for the automotive industry,<\/li>\n<li>making India a globally competitive auto Research &amp; Development and manufacturing hub and<\/li>\n<li>achieving the targeted objectives of green mobility.<\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>What are the provisions of National Automotive Policy?<\/u><\/strong><\/p>\n<p>The provisions of National Automotive Policy are as follows:<\/p>\n<ul>\n<li>Adopt a long-term roadmap for emission standards beyond <strong>Bharat Stage (BS) VI\u00a0<\/strong>and harmonize the same with <strong>global standards by 2028.<\/strong><\/li>\n<li><strong>Rollout Corporate Average Fuel Economy (CAFE)<\/strong> norms till 2025 and beyond and setup incentives\/ penalties.<\/li>\n<li>Adopt a <strong>composite criterion based on length and CO2\u00a0emissions<\/strong> to classify vehicles for differential taxation purposes.<\/li>\n<li><strong>Harmonize automotive standards<\/strong> over the next 5 years in line with <strong>WP-29.<\/strong><\/li>\n<li>Improve the skill development and training eco-system, increase accountability of <strong>Automotive Skills Development Council<\/strong> <strong>(ASDC)<\/strong> and implement a <strong>Labor Market Information System.<\/strong><\/li>\n<li><strong>Retain tax exemption<\/strong> on different levels of <strong>Research &amp; Development expenditure<\/strong> with strong audit control.<\/li>\n<li><strong>Scale-up of indigenous R&amp;D<\/strong> with commercially viable innovations.<\/li>\n<li>Harmonize <strong>Applicant Information System<\/strong> <strong>(AIS)<\/strong> and <strong>Bureau of Indian Standards (BIS)<\/strong> standards on safety critical parts over next 3 years.<\/li>\n<li>Fast track adoption of <strong>Bharat New Vehicle Safety Assessment Program.<\/strong><\/li>\n<li>It proposes creation of a nodal body with a two-tier structure having an <strong>Apex Body supported by the National Automotive Council (NAC).<\/strong><\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>What are the advantages of the new National Automotive Policy drafted for the holistic development of automobile sector in India?<\/u><\/strong><\/p>\n<p>The advantages of the new draft National Automotive Policy are as follows:<\/p>\n<p><strong>Industry-friendly:<\/strong><\/p>\n<ul>\n<li>The Government endeavors to make the New Auto Policy industry-friendly.<\/li>\n<\/ul>\n<p><strong>Boost for Make in India:<\/strong><\/p>\n<ul>\n<li>The policy ensures the success of Make in India scheme.<\/li>\n<\/ul>\n<p><strong>Changing with time:<\/strong><\/p>\n<ul>\n<li>The Ministry will\u00a0continuously adapt and modify the policy so as to keep up with the changing times.<\/li>\n<\/ul>\n<p><strong>Investment of international companies:<\/strong><\/p>\n<ul>\n<li>This policy takes major international companies into its account to invest in India.<\/li>\n<li>India and other international companies could work together in terms of investing in Research &amp; Development, sourcing of auto components from India, tooling &amp; advanced materials as well as software development.<\/li>\n<\/ul>\n<p><strong>Policy-stability:<\/strong><\/p>\n<ul>\n<li>The Ministry provides the policy-stability that overseas investors seek.<\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>What are the drawbacks in achieving the objectives of the new draft National Automotive Policy?<\/u><\/strong><\/p>\n<p>The loopholes in the new draft National Automotive Policy are as follows:<\/p>\n<p><strong>Differences between the standards of new and replacement parts:<\/strong><\/p>\n<ul>\n<li>Discrepancies between the standards of new and replacement parts can cause major issues in safety, emissions, and performance of the vehicle.<\/li>\n<\/ul>\n<p><strong>Dual certification requirements:<\/strong><\/p>\n<ul>\n<li>The dual certification requirements lead to higher cost of compliance for smaller manufacturers.<\/li>\n<\/ul>\n<p><strong>Poor domestic capability:<\/strong><\/p>\n<ul>\n<li>Poor domestic capability for producing components used in green vehicles will be a major bottleneck for shifting to cleaner vehicles.<\/li>\n<\/ul>\n<p><strong>Absence of a long-term industry roadmap: <\/strong><\/p>\n<ul>\n<li>Currently, the automobile industry needs a long-term visibility of automotive regulations and avoids any uncertainty on the future requirement of technologies, testing and skills.<\/li>\n<\/ul>\n<p><strong>Shortage of skilled manpower: <\/strong><\/p>\n<ul>\n<li>The automotive industry in India is in continuous need of skilled manpower, given the limited training capacity and employability of the trained workforce.<\/li>\n<\/ul>\n<p><strong>Issues with the supply chain infrastructure: <\/strong><\/p>\n<ul>\n<li>Inadequate development of logistics and supply chain infrastructure in India leads to inefficiencies, delays and high costs.<\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>How will the objectives of National Auto Policy implemented for its long-run success?<\/u><\/strong><\/p>\n<p>The objectives of the National Auto Policy will be met through policy interventions across three identified focus areas. These include:<\/p>\n<ul>\n<li>Innovation,<\/li>\n<li>Research and<\/li>\n<li>Development<\/li>\n<\/ul>\n<ul>\n<li>Automotive companies across the value-chain will be encouraged to intensify innovation and research by developing domestic capabilities.<\/li>\n<li>New entrants and existing original equipment manufacturers will be supported in their domestic and export growth ambitions, while ensuring a level playing field for all.<\/li>\n<li>The component manufacturers will be encouraged to move up the value chain through higher value-added offerings in electronics, electrical and system supplies.<\/li>\n<\/ul>\n<p><strong><u>\u00a0<\/u><\/strong><strong><u>What are the recent government initiatives for the automobile sector of India? (Updated)<\/u><\/strong><\/p>\n<p>Some of the recent initiatives taken by the Government of India are:<\/p>\n<ul>\n<li>The Government of India encourages foreign investment in the automobile sector and allows <strong>100 per cent FDI<\/strong> under the automatic route.<\/li>\n<li>The Government of Karnataka is going to obtain electric vehicles under the <strong>Faster Adoption and Manufacturing of (Hybrid &amp;) Electric Vehicles in India (FAME)<\/strong> Scheme and set up charging infrastructure across Bengaluru.<\/li>\n<li>The Ministry of Heavy Industries, Government of India has shortlisted <strong>11 cities in the country for introduction of electric vehicles (EVs)<\/strong> in their public transport systems under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme.<\/li>\n<li><strong>Energy Efficiency Services Limited (EESL),<\/strong> under Ministry for Power and New and Renewable Energy, Government of India, is planning to procure <strong>10,000 e-vehicles via demand aggregation.<\/strong><\/li>\n<li>The government is planning to set up a <strong>committee to develop an institutional framework on large-scale adoption of electric vehicles in India <\/strong>as a viable clean energy mode, especially for shared mass transport, to help bring down pollution level in major cities.<\/li>\n<\/ul>\n<p><strong><u>Way ahead:<\/u><\/strong><\/p>\n<ul>\n<li>The Indian automotive aftermarket is estimated to <strong>grow at around 10-15 per cent<\/strong> to reach <strong>US$ 16.5 billion by 2021 from around US$ 7 billion in 2016. <\/strong><\/li>\n<li>It has the potential to generate up to <strong>US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India\u2019s Gross Domestic Product. <\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Context: Ministry of Heavy Industries and Public Enterprises is working for formulating the National Automotive Policy for holistic development of automobile sector in India. Background: The Government of India and the Indian automotive industry articulated their objectives for the future of the industry through the Automotive Mission Plan 2016-26 (AMP 2026). The very need of&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/new-draft-national-automotive-policy\/\">Continue reading <span class=\"screen-reader-text\">New Draft National Automotive Policy : An analysis<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":15893,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[34],"tags":[],"class_list":["post-16626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2018\/02\/electric-cars-india.jpg?fit=1008%2C561&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/16626","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\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=16626"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/16626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/15893"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=16626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=16626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=16626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}