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Indian auto component business losing to cheaper imports

By Motortrend India Staff   |   21 February,2008

India is turning into a manufacturing hub for the auto sector. Out of the 175 leading car component manufacturers based in Western India, most of them are located in and around Pune. According to Janardan Rao, Vice President of Minda Industries, which is a major manufacturer of auto lighting and electrical equipment, there has been a tough competition in India's auto component industry domestically as well as in terms of exporting. He added that with the proposed Free Trade Agreement (FTA) with ASEAN countries, there are chances of cheaper car imports flooding the market in India.

This is one of the major issues the component manufacturers are facing and they expect the Financial Minister to take appropriate action and stop cutting the custom duty further. The auto component manufacturers are of the opinion that the custom duty should not be dropped below 5% and that the excise duty should be cut by 50 percent from the current 16 percent to a hopeful 8 percent.

Mukesh Patodia, Managing Director of Optima Auto Lamps, which has been in the auto bulb business for decades, is of the opinion that his business is slowly deteriorating due to the low cost Chinese imports.

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