India auto sector attractive for investing: Arun Goel on Ford plant closure

The Secretary, Ministry of Heavy Industries, said the country has seen investments of $34.5 billion in the past five years, to substantiate his point

Days after Ford India announced the closure of its plants at Maraimalai Nagar in Tamil Nadu and Sanand in Gujarat, a top government official said that the past five years would not have seen investments to the extent of about $34.5 billion had the country’s automotive sector been not attractive, indicating that business decisions are based on each company’s ‘corporate strategy.’

Addressing the media in Chennai on Monday, Arun Goel, Secretary, Union Ministry of Heavy Industries, said that the country has seen investments of around $34.5 billion in the last five years. “If the Indian auto ecosystem was not attractive, why would that investment have come in?,” he said talking about the Ford India announcement.

Goel was having a discussion on the production linked incentive scheme (PLI) for the automobile industry with a budgetary outlay of Rs 26,058 crore. PLI Scheme for Automobile Industry and Drone Industry is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 trillion.

With the announcement of PLI Schemes for 13 sectors, minimum additional production in India is expected to be around Rs 37.5 trillion over five years years and minimum expected additional employment over five years is nearly 10 million. It is estimated that over a period of five years, the PLI Scheme for automobile and auto components industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 trillion and will create additional employment opportunities of over 750,000 jobs.

The PLI scheme is expected to boost the industry after the announcement by Ford India early this month. It was on September 9 that the company had announced the shut down of assembling in Sanand by the fourth quarter of this financial year and vehicle and engine manufacturing in Chennai by the second quarter of 2022.