The Automotive Mission Plan 2016-2026 envisages that the Indian auto industry will be among the top three of the world in engineering, manufacture and export of vehicles and components, making the industry grow in value to over 12% of India’s GDP and generate additional 65 million jobs.
Continued investment and access to technology are key to meeting the AMP 2026 objectives. And investment and access to technology depend upon creating and adhering to a well-designed policy framework based on data and information, understanding of the role and limits of technology, and the cost-effectiveness of policy measures.
Towards that, the government must lay out a clear roadmap for the industry that covers fuels including biofuels; fuel efficiency and emission standards; safety, vehicle testing and certification requirements and methodologies; electric and hybrid cars; autonomous vehicles; etc. Such a policy framework should be forward-looking, consistent and realistic, should have final and intermediate targets, and should be technology independent and flexible to allow the industry to meet the specified targets.
It should also provide clarity in terms of what the industry can expect in the future. Given the long lead times and investments that are involved in bringing new technologies to the market, this clarity is essential. Let’s take the example of autonomous cars, which are not yet on the horizon in India. However, this technology is rapidly developing and is expected to be on the roads within the next five years in several countries. If the Indian industry is to be a global player, it needs to lead rather than follow global developments. Thus, clarity of policy on autonomous vehicles can help stimulate innovation in the area of autonomous vehicles.
Another example is fuel policy. If fuel properties are not in line with the emission standards, then meeting these standards is either impossible or very expensive.
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As far as Indian emission standards are concerned, these are based on European standards, which, in turn, are based on the European driving cycle. However, the European driving cycle is different from India’s—driving speeds are much lower in India, and lower speeds mean more emissions. Then, the temperatures at which vehicles operate in India are different than in Europe, affecting emissions. Not taking such differences into account means that meeting emission standards is difficult. Also, in India we specify emission standards by the class of a vehicle. It may be worthwhile to explore the Corporate Fuel Economy Average (CAFE) approach, as it allows manufacturers room in terms of reducing emissions across the range of models.
Clearly, a well-designed policy framework will go a long way in improving the global competitiveness of the Indian automobile industry, and help assure investors that their investments will yield expected returns.
By- KK Kapila
The author is chairman, International Road Federation*, Geneva. Views are personal
(* Not affiliated with the International Road Federation, Washington, DC)