Govt to Study Auto Supply Chain to Boost Localization

The government has sought detailed information from automobile manufacturers on investments in the country, industry imports and localisation levels across value chains in a bid to curb imports and promote indigenous manufacturing.

The move follows a meeting between commerce & industry minister Piyush Goyal and senior auto industry representatives on August 13 to deliberate on possibilities of increasing localisation in the automotive sector , which was followed up with a review meeting on Friday, where 24 sectors were reviewed.

China is India’s largest supplier of auto parts.

Sources told that the need for reduction in imports of steel, tyres, electronic components and parts of electric vehicles were discussed in detail. The industry said if it could attain the target of selling 65 million vehicles annually by 2026 as outlined in the Automotive Mission Plan, it will give it scale required for a very high level of localisation.

The commerce ministry thereafter directed the industry to share company-specific information related to investments, localisation levels, exports, imports and royalty payments. Industry body Society of Indian Automobile Manufacturers (SIAM) has been asked to collate the data and share it.

“There is a lot of pressure. The government has been holding review meetings every fortnight to look at ways to increase localisation levels not only at the level of original equipment manufacturers (OEMs) but also their tier-I and tier-II vendors. The minister understands sourcing is top-down and has asked vehicle makers to submit the required data, an industry executive said on condition of anonymity.