NITI Aayog asks govt to incentivise auto components manufacturing

NITI Aayog on Friday suggested the government to provide fiscal incentives for auto components manufacturing and develop brownfield large-scale auto clusters for positioning India as a key player in global automotive markets.

The report titled “Automotive Industry: Powering India’s Participation in Global Value Chains” was launched by NITI Aayog Vice Chairman Suman Bery.

The report envisions the country’s automotive component production growing to USD 145 billion, with exports tripling from USD 20 billion to USD 60 billion by 2030.

Additionally, the report said this growth is expected to generate 2-2.5 million new employment opportunities, bringing the total direct employment in the sector to 3-4 million.

“The government should provide operational expenditure (Opex) support to scale up manufacturing capabilities, with a focus on capital expenditure (Capex) for tooling, dyes, and infrastructure,” it said.

It outlines several strategic fiscal and non-fiscal interventions aimed at enhancing India’s global competitiveness in the automotive sector.

“The government should also support cluster development for fostering collaboration between firms through common facilities such as R&D and testing centres to strengthen the supply chain,” it said.

It also called for promoting joint ventures (JVs), foreign collaborations, and free trade agreements (FTAs) to expand global market access.

The report suggested that there is a need to encourage the integration of digital technologies and enhanced manufacturing standards.

Business