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Monday 22nd March, 2010

Higher auto components' import foreseen

IANS Sunday 7th March, 2010

India's automobile
industry could
increase import of
components by as
much as 42
percent by 2013-
14, based on
current
consumption
levels. Imports
could grow faster, More than 25 million people in the UK
once free trade alone know a close friend or relative that
agreements (FTA) has dementia. The perception is those
suffering from the disease are old, and in
with a host of a nursing home. In fact people of all ages
countries come can get Alzheimer's, for which there is no
cure. And as far as lifestyle is concerned
into effect, says there is no need for change.
an industry body.

According to a Breaking News

Monday 22nd March, 2010
study by the
Federation of Maliki back in Iraq election lead
Indian Chambers
of Commerce and Israeli Arabs part of new money plan
from Tel Aviv
Industry (FICCI)
on imports of auto Pakistan tribesmen killed in Taliban
components, the beheading spree

share of imported Islamic countries pledge money to help

auto components Darfur
in India's domestic
Thai protestors spill blood for Thaksin
market is set to
make a manifold News on other Topics
jump from the More Breaking News

current 31
percent.

'In view of custom

duty reduction on
several auto
components under
India-ASEAN and
India-South Korea
FTA, and
forthcoming India-
EU and India-
Japan FTA, the
share of imports in
domestic auto
component market
is likely to be 50
percent by 2013-
14,' the study said.

As per the India-

ASEAN FTA,
custom duty on
auto parts like
pistons, piston
rings, bumpers,
gear boxes and
radiators would be
0 by 2013.

Similarly, custom
duty on
motorcycle and
engine parts
would also come
down to 5 percent
level or 0 under
the India-South
Korea FTA.

'This could affect

our plans to
achieve the
targeted size of
$40-45 billion of
auto component
industry by 2016
under the
Automotive
Mission Plan
announced in
2006,' said the
report.

India continues to
be a net importer
of auto
components,
despite being a
favourable
destination for
small cars.

The country's
trade deficit in
auto components
has soared from
371 million dollars
in 2004-05 to 2.8
billion dollars in
2008-09.

Auto parts imports

increased by an
annual average
rate of 30 percent
during this period
but exports grew
by 17 percent
(much below the
imports) for the
same period.

The European
Union continues to
be the largest
source of imports
with a share of 35-
37 percent in our
total auto
component
imports. Imports
from China
increased 4.5
times from 2
percent in 2004-
05 to 9 percent in
2008-09.
South Korea's
share grew from
15.4 percent to 17
percent in the
same period while
that of the US and
Japan came
down. Of late,
imports from
ASEAN countries
have shown a
rising trend.

'In order to ensure

orderly
development of
domestic auto-
component
industry in view of
the growing
challenges from
various FTAs,
FICCI suggests
that the
government
should create a
conducive
environment to
attract
investments in the
sector,' said a
FICCI statement.

'The government
should provide
fiscal incentives
for promoting
production of
critical and high
value added
components,' it
added.

The body
suggested
constituting an
Automotive
Development
Fund (ADF) and
Industrial
Adjustment Fund
(IAF) on the lines
of similar
resources created
in Malaysia.

The ADF in
Malaysia is a
government
initiative which
extends soft loans
(below market
interest rates) to
improve the
overall
competitiveness of
the automotive
industry,
particularly the
parts and
components
manufacturers.

And IAF was

established to
 assist Malaysian
manufacturers to
face the
challenges
brought about by
increased
competition and
liberalisation.

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