Car manufacturers in India, which just got an ugly shock with withdrawal of excise duty exemptions, may have something to hinge on in the new fiscal year since the centre is examining the possibility of extending incentives for export of cars to all markets, including large ones such as the European Union (EU) in view of dwindling exports for the industry.
The Heavy Industry Ministry has proposed to the Commerce Ministry to include car exports in the ‘focus product’ scheme so that shipments to major markets could be incentivized. Under the Focus Product scheme, an incentive of up to 5% of the export value is for exports of specific products to all markets. Under the present Foreign Trade Policy, an incentive of 2 per cent of export value is given to cars shipped from India to markets where the country has an insignificant presence, such as Bangladesh, Kenya, Kuwait, Pakistan, Russia, Singapore and Ukraine. China and Japan, too were included.
Notably, India’s car exports declined 8.3% to 2.68 lakh units in the April-September 2014-15 period, according to data from the Society of Indian Automotive Manufacturers (SIAM).
However, this is not for the first time that Heavy Ministry was proposing something of this sort. The Ministry in the ‘Make in India’ workshop as well, pitched for inclusion of cars in the Focus Product scheme, where it argued that such a sop would encourage manufacturing in India.