Government considers sops to boost export of auto components

The government is considering giving incentives to the auto component industry to boost exports, with the Ministry of Commerce and the Department of Heavy Industry conducting a joint assessment of the sector.

"The automobile components industry, particularly exports, has been facing a tough time. Both the Ministry of Commerce and Department of Heavy Industry are doing an assessment of the sector with a view to give a push to exports," an official told PTI.

The auto component sector has been hurt by the slump in automobile demand, in both the domestic and export markets.
 

"Once the assessment is completed, both the ministries will see if incentives could be given to the sector," the official added.

The Automotive Component Manufacturers' Association of India (ACMA) has approached the Department of Heavy Industry to take steps to support the industry and address issues such as the high cost of borrowing and export incentives in the wake of rupee depreciation.

"The outlook (auto components exports) remains uncertain for the current fiscal as there is a weak demand globally," the official said.

The component industry has felt the hit of the drop in car sales, which fell for a record eighth month in a row in June. In the first quarter of this fiscal, passenger vehicles sales have dropped 7.24% from 6,54,858 units in the same period in the previous fiscal.