Industry body seeks more incentives for auto industryJanuary 31st, 2009 - 4:38 pm ICT by IANS
New Delhi, Jan 31 (IANS) Industry body Federation of Indian Chambers of Commerce and Industry (FICCI) Saturday urged the government to offer more incentives to the domestic auto industry and encourage foreign investment in the sector. In a study on ‘Automotive Policies And Incentives in Developing Countries’, the FICCI said the automotive industry in several developing countries were growing fast with the assistance of their respective governments.
It said there has to be an appropriate tariff policy in the country to safeguard the domestic auto industry from surge in imports and to develop adequate indigenous manufacturing base.
The study said India remained a small player in the world automotive market with a share of around 3 percent in the production of passenger cars and commercial vehicles (compared to China’s 12 percent) and a share of 0.6 percent in world automotive exports.
Developing countries like Thailand, Brazil, South Africa, China and Malaysia were providing liberal assistance and incentives to their automobile sector to attract foreign investment and to develop domestic manufacturing capacity, the study said.
At present, India is the eighth largest manufacturer of commercial vehicles and ninth largest manufacturer of cars, while China is the second largest manufacturer of cars and commercial vehicles.
India continues to be a net importer of automotive items with a trade deficit of over $4 billion in 2005-06 and 2006-07. In 2007-08, the deficit has narrowed down.