India’s automotive parts sector is looking for concessions from the federal budget this month (it will be announced July 6), including duty cuts on raw materials and increases to duties on imported components.
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“From an industry perspective everyone would like customs duties to be lowered as much as possible on the raw material side. That will help the industry to become more cost competitive,” Pankaj Mital, Chief Operating Officer of auto parts maker Motherson Sumi Systems told the Reuters news agency.
Customs duty on most steel items as well as copper, key imports for auto parts industry, is currently around 5 percent, Reuters noted.
“You have customs duty on the raw materials here, if that is lowered competitiveness of the manufacturing sector will improve,” Mital said.
Reuters reported that the Indian government has already cut excise duties across the board to 8 percent in February in a move to protect vulnerable industries – including automotive.
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By GlobalDataCustoms duties on imported auto component products should be raised to 10 percent from the existing 7.5 percent to boost local production, said Arvind Kapur, managing director of Rico Auto Industries Ltd, speaking to Reuters.
“We hope the customs duties [on finished products] are bought up. Because of the recession China and other countries have started dumping components in India. They should take it up to 10 percent,” Kapur added.
