• Exalt the sector as a lever of industrial growth and employment and to achieve a high degree of value addition in the country.
• Promote a globally competitive automotive industry and emerge as a global source for auto components.
• Establish an international hub for manufacturing small, affordable passenger cars and a key center for manufacturing Tractors and Two-wheelers in the world.
• Ensure a balanced transition to open trade at a minimal risk to the Indian economy and local industry.
• Conduce incessant modernization of the industry and facilitate indigenous design, research and development.
• Steer India's software industry into automotive technology.
• Assist development of vehicles propelled by alternate energy sources.
• Development of domestic safety and environmental standards at par with international standards.

SIAM welcomed the announcement of Auto Policy, and feels that the policy would serve as a reference document for all stake holders and other interested parties.

The Auto Policy has spelt out the direction of growth for the auto sector in India and addresses most concerns of the automobile sector, including-

• Promotion of R&D in the automotive sector to ensure continuous technology upgradation, building better designing capacities to remain competitive.
• Impetus to Alternative Fuel Vehicles through appropriate long term fiscal structure to facilitate their acceptance.
• Emphasis on low emission fuel auto technologies and availability of appropriate auto fuels and
  encouragement to construction of safer bus/truck bodies - subjecting unorganised sector also to 16% excise duty on body building activity as in case of OEMs
  

The policy has rightly recognised the need for modernising the parc profile of vehicles to arrest degradation of air quality. The terminal life policy for commercial vehicles and move toward international taxing policies linked to age of vehicles, are steps in the right direction.

SIAM has always been advocating encouragement of value addition within the country against mere trading activity. However, this aspect has not been fully addressed. The Auto Policy allows automatic approval for foreign equity investment upto 100% in the automotive sector and does not lay down any minimum investment criteria.

The recommendation of promoting passenger cars of length upto 3.8 meters through excise benefits is not in line with the free market concept and may lead to market distortion.

However, with the Auto Policy in place, the automotive industry would get further fillip to become vibrant and globally competitive. The industry would get the required support from other Ministries and departments of Government of India in achieving the goals laid down in the auto policy.

For further details go to http://www.dhi.nic.in/autopolicy.htm