In a strongly-worded message, Commerce and Industry Minister Piyush Goyal urged the auto industry to reconsider importing components from countries that don’t provide equal access to Indian players. However, Goyal emphasized that companies can still import quality products if they are not available domestically.
Addressing the annual convention of the Society of Indian Automobile Manufacturers, Goyal expressed concerns about unnecessary imports that hinder India’s opportunities in other countries. While he did not elaborate on his remarks, he highlighted the need to evaluate industry practices related to sourcing and pricing of imported components dictated by parent companies.
Goyal questioned the legality and fairness of transfer pricing and urged auto industry players to reflect on these issues. He also mentioned the possibility of the government delving into this matter in the future. Moreover, Goyal emphasized the need for retaliatory action against countries that restrict access for Indian steel companies.
Notably, some companies in the auto industry import automotive steel from their parent countries. Although approximately 20% of the industry’s requirements are still reliant on imports, Goyal dismissed the notion that global auto firms bring investments into India, attributing investments to the size of the Indian market instead.
Goyal criticized companies that route investments from one geography while importing components from third countries that are hostile to India. He also highlighted the need to examine products imported at zero duty under free trade agreements to ensure a level playing field for Indian suppliers.
However, Goyal clarified that he is not against all imports, emphasizing the importance of domestic trust and boosting R&D and design capabilities. Additionally, the minister expressed concerns about workforce skilling, upskilling, and re-training, urging the industry to prioritize these areas as well.
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