Expand footprint in developed markets: Goyal to auto component cos

Commerce minister asks industry to leverage trade agreements, build overseas manufacturing presence, move up the value chain and strengthen supply-chain resilience

Piyush Goyal, the Commerce and Industry Minister, on Wednesday urged Indian auto-component manufacturers to expand beyond the domestic market and establish a presence in developed countries.

 

“Now it is time that we go to the world. We start manufacturing across the world. We start making our footprint in developed countries,” Goyal said while addressing the 66th annual session of the Automotive Component Manufacturers Association of India (ACMA), in the presence of Sergio Gor, US Ambassador to India, and Harjinder Kang, UK’s Trade Commissioner for South Asia and British Deputy High Commissioner to Western India.

 

Goyal said India had added 38 developed countries through the nine trade agreements concluded over the last four to five years under Prime Minister Narendra Modi’s government. These agreements, he said, provide market access to economies representing a combined GDP of $60 trillion.

  

He contrasted this with the trade agreements concluded before 2014, which collectively covered economies accounting for about $10 trillion in GDP at today’s value.

 

Goyal said the developed countries covered by the recent agreements offered “less competition, more complementarity” to Indian auto-component manufacturers. He urged the industry to use the market access created through these agreements to expand internationally.

 

“That, friends, is the future that I invite all of you to carve for yourself across Europe, across the United States of America,” he said.

 

The minister also asked component makers to convert their local businesses into global businesses and build resilience into their supply chains through active indigenisation.

 

“Now convert your local businesses to global businesses,” Goyal said, adding that companies should have “an active indigenization program” for products where they still need to build resilience in their supply chains.

 

He also called on the industry to move up the value chain and deliver integrated, high-value solutions to global markets.

 

“I think it's time we started delivering integrated, very high-value solutions, where we have designed, built, and supplied to the world top-quality products, which should be the envy of the world,” Goyal said.

 

Goyal also said that the government expects the auto-component industry to work towards its $500-billion target, which it had set earlier, with the help of global expansion, higher-value products and the participation of women in key roles. “Let’s at least double the number of women on the shop floors of the auto-component industry,” he said.

 

The minister said that the industry needs to be conscious of safety rather than just leaving it to the government. “While in India we may not really need autonomous driving, features such as advanced cameras are very useful for safety,” he said.

 

“Why do you leave it to the government to worry about safety of cars (auto-lock in feature) in dangerous situations such as floods or an unfortunate event? We all should be worried about it as the automotive sector.”

 

Sergio Gor, in his address, said that US-India cooperation is the engine under the hood of the global automotive industry.

 

“As our governments work through the details of our trade relationship, we should aim to create an environment where American suppliers and technology can freely access the market to be sold to Indian manufacturers, and Indian firms can compete fairly in the US market,” said Gor. “This benefits both workers and companies on both sides.”

 

Goyal’s comments come as the Indian auto-component industry looks to expand its global footprint, with the government pushing trade agreements as a means of opening overseas markets for Indian manufacturers.