The announcement of increasing the duty on CKD units has created much anger and dissatisfaction in the auto industry. The engine and transmission importers have been taken aback by the abruptness of the new norms. However, it seems Mr Praful Patel, the heavy industries Minister is one man from the Government who is standing by the Auto Industry. Mr Patel has come out with a unique working solution which seeks extension of 2 years for the auto companies which import their engine, transmission and other components before the new CKD import tax structure is implemented. Two years sounds like a sufficient period for Auto companies to localize their engine and transmission manufacturing.
Even the fact that one of the ministers is talking on behalf of the Auto Industry makes all the effort of the SIAM and other Auto makers, see good light. The current CKD definitions set in this year’s Annual Budget have proved worrisome especially to the international auto makers. With the extension time, the auto companies should start their engine, transmissions & other components manufacturing here in the country. This will prove to be a boon for both the Auto companies and the government as localization will increase the manufacturing plants hence generating employment.
We have sent a formal request to the Ministry of Finance with the request from SIAM. The industry is asking sometime to set up facilities to have more indigenization. And this we have forwarded (to the Finance Ministry). Now this is a issue of the Finance Ministy to decide on. We do share some of concerns of the industry. According to them (auto makers), it will take a year to have more indigenization – Mr Praful Patel