Automobile industry in talks with Centre for export promotion body

Rupali Mukherjee

New Delhi, Oct 14: The automobile industry is in consultations with the government for setting up a body for promotion of exports for the industry. Industry bodies — Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) have, in one of the rare instances, come together and are preparing a framework for the export promotion organisation.

Government sources said that the “industry has discussed with us the idea of setting up of a body specifically engaged to handle automobile exports and its promotion. The automobile industry is one of the major contributors to our country’s GDP and if we can promote auto exports it will also earn us foreign exchange”.

Sources also said that the idea of setting up such an organisation was first mooted by the ACMA as it sees lot of potential for auto component exports to major countries.

The ACMA is studying the model of the existing Engineering Export Promotion Council (EEPC) and looking at its articles and memorandum, official sources said. The EEPC has engineering companies as its members.

“The proposal of setting up an organisation for automobile exports is at a preliminary stage and we are studying how it can be formed”, sources in ACMA said. The proposed organisation will focus on automobile exports, export promotion activities such as creating awareness in the overseas markets of the ‘Made in India’ brand, and educating opinion leaders about the brand.

The government does not give funds for promotion of automobile exports as in other countries such as the UK government, which promotes trade and exports, industry watchers said.

“The UK government’s department of trade and industry has been doing lot of work for promoting exports from their country and is also working with the Society of Motor Manufacturers and Traders for this purpose”, they added. Industry watchers pointed out that there is a lack of confidence in products manufactured in India and existing incentives for promoting exports are ineffective. Also, international community has very little idea of the progress made by India, especially in automobiles.

Even for international brands, country of origin is creating problems. The same vehicle, when imported in completely knocked down /semi-knocked down (CKD/SKD) condition by the parent company and sold as locally-made is fetching a higher price than a domestically produced vehicle.

It is suggested that there should be a large outlay for promotional expenditure to build a strong ‘Made in India’ brand in overseas markets and for building confidence in Indian products abroad.

The government along with the industry should create a market development fund for exports. This fund should have two components — common pool and export-linked assistance.