Auto margins could come under near-term pressure on higher duties

Commercial vehicle companies to gain the most on scrappage, bus orders and infra boost

While most of the proposals for the auto sector in the Budget were positive, the increase in duties on certain auto parts to 15 per cent from 7.5 per cent to 10 per cent could lead to higher costs for auto makers. Though these measures will encourage localisation in the long term, Saurabh Agarwal, Tax Partner, Automotive sector, EY India believes that there could be some pressures in the near term as auto part makers pass on the higher import duties. Though overall annual auto imports are pegged at Rs 2 lakh crore only half of this is impacted as