In order to boost the auto components exports, the government is considering giving incentives to the auto component industry as the sector, especially exports, has been facing a tough time. The Ministry of Commerce and the Department of Heavy Industry (DHI) are doing an assessment of the sector and once the assessment is completed, both the ministries will see if incentives could be given to the sector.
Presently, the sector has been hurt by the slump in automobile demand, in both the domestic and export markets. The overall domestic sales during April-June 2013 quarter declined by 2.10 percent over the same period last year. On the other hand, overall automobile exports declined by 5.65 percent during April-June 2013.
Concerned over the declining demand in the sector, the Automotive Component Manufacturers’ Association of India (ACMA) has approached the Department of Heavy Industry to take steps to support the auto component industry and to address issues such as the high borrowing cost and exports incentives in the wake of rupee depreciation. Meanwhile, the country’s auto component export is expected to remain sluggish in the near term on account of weak global demand.
