‘Indian auto industry to grow more than 3.5 times by 2026’

‘Indian auto industry to grow more than 3.5 times by 2026’

Exports of automotive are targeted to move up to Rs.2,95,000 crore by 2026, Shankar said.

By Aamir H Kaki

The Heavy Industries Secretary Girish Shankar on Thursday said that the Indian auto industry will grow by 3.5 times, from the output of around Rs.464,000 crores in 2015 to above Rs.16-19 lakh crore by 2026.

“We have finalised the next Automotive Vision Plan 2016-2026, as has been the case with the previous one, combined efforts of the government of India and the industry, we chart a growth path that we jointly seek to achieve,” Shankar said, while speaking at the 2nd ASSOCHAM Auto Forum & Awards 2017 in New Delhi.

“This Vision Plan also seeks to define the trajectory of the evolution of the automotive eco system in India including deadline of specific regulations and policies that govern a wide range of parameters that affect this industry,” he added.

As an outcome of Vision 2026, he said, “We expect the Indian auto industry to grow by 3.5 times, compared to Rs.464,000 crores in 2015 to above Rs.16-19 lakh crore by 2026, considering an average annual GDP growth ranges between 6-7.5% during this period.”

Noting the importance of auto industry and contribution to the economy, the Secretary said that the industry generates demand for the rest of the manufacturing sector. Being a leading sector for overall economic growth, this sector is the thriving engine for the ‘Make in India’ programme, targeting an annual production of nearly Rs.19 lakh crore in terms of its stake size and has established itself firmly on the global stage.

“Besides, it will also be a key player in ‘Skill India’ programme, targeting an additional 65 million jobs,” he added.

Shankar said that India is becoming a leader in automotive manufacturing. “By 2026, India would stand first in the world in production and stake of small cars, two wheelers, three wheelers and buses.”

The Secretary mentioned that the Government is continuously providing support to the auto industry and promoting domestic manufacturing.

India is one of the few economies that has domestic manufacturing in automobiles. This was made possible due to the supportive eco system created by the government enabling local manufacturing, he said. ‘As a result, almost all the global auto companies are present in India today. Many manufacturers, including auto components & parts, have made India as their base,’ he added.

He also said that the Vision 2026 is also targeted to increase exports of automobiles from the country. “Exports of the automotive vehicles, from the level of Rs.2500 crore in 2015, are targeted to move upto around Rs.2,95,000 crore by 2026,” he added.

Mentioning that the Government is also working in the field of green mobility in the sector, Shankar said, ‘Our department of Heavy Industries, being the administrative machinery for the automotive industry, has the onus of leading and steering the policy alignment needed to meet the expectations towards green mobility in India.’

The government also has plans to introduce a new green urban transport scheme with a central assistance of about Rs.25000 crores in order to boost low carbon transportation system modelled on substantial reduction of pollution and providing a framework in funding the urban mobility projects at the national, state and city level, with minimum recourse to budgetary support by motivating innovative projects.

The Secretary further said that there is a huge gap, which the auto industry must address to ensure ‘Make in India’ is really creating and developing in India. The Original Equipment Manufacturer (OEM) needs to make substantial investments in engineering  R&D for designing and developing in India, so that India graduates to a truly Auto Engineering hub rather than continue being a place for manufacturing only prints.

We request the auto majors to consider this seriously and fast enough. Also, suggest to us as to how to support this through an appropriate policy framework. We are already working towards this direction.

Bandaru Dattatreya, Minister of Labour and Employment, was the Chief Guest at the event. He presented the ASSOCHAM Auto Awards 2017 to the winners.