This policy aims to promote integrated, phased, enduring and self-sustained
growth of the Indian automotive industry. The objectives are to:-
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
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
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
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
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
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.
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