New Delhi [India], September 12 (ANI): Auto component industry leaders on Friday voiced optimism over the recent GST rationalisation and the free trade agreements (FTAs) the government is working on.
At the same time, they also raised concerns over rare earth shortages and delays in product development cycles, during the Automotive Component Manufacturers Association of India's (ACMA) annual event held here in the national capital.
Vivek Vikram Singh, Managing Director and Group CEO of Sona Comstar, urged the government to engage with China on the rare earth supply.
"We need solutions. The government should engage with the Chinese side and eliminate these rare earth export controls. The interim solution (using rare-earth-free magnets) is not the best. This affects us and our customers. It would be good if the problem is resolved. We are operating with constraints now, and our hope is that it will run smoothly going ahead," he said, talking to ANI.
Early this April, China announced a decision to implement export controls on certain rare earth-related items, pushing a supply shortage across the world, including India. Export controls imposed by China have raised concerns about supply chain vulnerabilities, particularly in critical sectors.
Singh added the company had "three weeks of production loss in the past quarter due to a rare earth shortage."
On the policy front, Singh welcomed GST rate rationalisation, calling it "a bardaan (boon) for the industry, and Modi ji has got Diwali early this year. If the GST rate cut is completely transmitted to consumers, then the demand can rise upwards of 10-15 per cent. Growth is definite. It is a positive and a bold step."
On the India-European Union FTA, for which talks are currently underway, Singh added, "From India's point of view, the European FTA is vital. The size of the EU market in terms of auto is lower than that of the US, but it is quite crucial. In terms of value, too, it is quite sizable. For India, it is a big opportunity, and we should not miss this opportunity."
Echoing the sentiment on FTAs, Shradha Suri Marwah, Chairperson and Managing Director of Subros Ltd, said, "We welcome FTAs as they help us reach newer markets. Any number of FTAs the government does is for the betterment of us."
On U.S. tariffs, she said, "We have full faith in our government. We are meanwhile actively looking at other markets for exports."
Vikrampati Singhania, Vice President of ACMA and Managing Director of JK Fenner India, said the recent GST rationalisation is a win-win for all sectors.
"It will benefit consumers if those (reduced GST) rates are passed on to them. The people who postponed their buying intention will come out and buy goods. In the long run, the industry will grow."
He added that while US tariffs could affect some exports, it should be a "temporary bump."
Speaking to ANI, Brajesh Chhibber, Partner at McKinsey and Company, said India has opportunities amid global challenges, such as tariffs and supply chain issues.
"Europe is a big market. India's neighbour, Southeast Asia, can be a good market; Africa and Latin America are other big markets. In China, it would be a little difficult because they are increasingly moving towards EV," he said.
He suggested India can become a global leader by unifying its capabilities, improving quality, and reducing costs.
Ravindra Patki, Managing Partner with Vector Consulting Group, highlighted challenges in product development timelines.
"More than 80% of the surveyed CXOs (by us), almost around 36 CXOs that we surveyed, have reported that their vehicle developments are getting delayed. And if you look at the problem statement, the life cycle of the product is coming down," he said. "The technology is changing quite frequently. The features are changing. Software-defined vehicles are coming into place. So... now that life has been reduced to maybe two years and even less in some cases. If your development cycles are long, then you are always playing a catch-up game."
Karn Nagpal, President of Rosmerta Technologies, emphasised the need for investment in automated testing facilities.
"We play a very active role, and I think our Minister Shri Nitin Gadkari also stated the same that the need of the hour is for the OEMs and tier 1s to invest in automated driving test tracks and automated testing stations for vehicle roadworthiness as well as the recycling facilities for the vehicles," he said. (ANI)
(This article was generated from news agency ANI without modifications to the text.)
