Increase localisation or we will increase customs duty on import of automotive components: Nitin Gadkari warns domestic automakers

Union Minister for Road, Transport and Highways (MoRTH) Nitin Gadkari has said that the Government will increase customs duty on the import of automotive components if domestic automakers do not seriously work towards increasing localisation.

Speaking at the 6th Automotive Component Manufacturers Association of India, ACMA Technology Summit through video conferencing, Mr Gadkari reiterated that the industry needs to stop imports and automotive component makers need to develop good alternatives to imports at reasonable costs. He requested auto manufacturing companies to take localisation very seriously, saying this is the time for the industry to support the Make in India movement.

The centre has already increased basic customs duty on the import of automobile components this year. The finance minister announced a hike in the import duty on several auto parts like electricals, toughened glass and engine components among others from 7.5-10 per cent to 15 per cent to support the domestic industry.

The Minister said, it is because of the strong capabilities of the components sector that the vehicle industry in India has been able to achieve localisation levels of around 70 per cent. He urged the vehicle and component manufacturers to increase localisation of components to the maximum.

Mr Gadkari said, to support the automobile industry, the Government is working on framing the final vehicle scrappage policy and on resolving issues related to shortage of raw materials such as steel to encourage replacement demand and ease production challenges.