Indian automobile sector is important to boost economy. India is expected to be the third largest market globally after China and the US by 2020. Automobile sector contributes 40 percent of the Indian manufacturing GDP and employment of about 29 million (direct and indirect).
Automobile industry is identified as one of the 25 thrust sectors outlined for growth. Indian Government needs to announce pro-business policy and automotive sector decisions to fuel growth. Indian auto industry looks forward to excise duty reduction reintroduction as an unified excise duty structure stands to be beneficial.
Adding to his 2016 budget expectations, Sumit Sawhney, Country CEO and Managing Director, Renault India Operations says a scheme to scrap old vehicles correctly will keep older cars off roads, improve environment, reduce fuel consumption and steer demand for green and efficient vehicles.
Policies introducing incentives for environment-friendly vehicles are anticipated. GoI looks forward to India moving from Bharat Stage IV to VI emission norms in 2020. The one stage omission proposal will keep manufacturers on their toes, and warrants investments for new tech. Indian auto industry is hopeful that the Centre offers incentives to promote hybrid and electric cars. The government would also need to be involved in infrastructure development to make it a viable solution.
GST bill implementation will support uniform tax structure across states. Rural demand revival would benefit with 7th Pay Commission implementation. Increased funding for infrastructure development is anticipated. A healthy balance between interest rates, inflation and rupee stability would be beneficial. Incentives to encourage automotive sector growth will play a crucial role, and aid in job creation.