Auto task force for special fund to finance global buys

Task force's 10-year mission aims to make India a global auto player.

The sub-committee on exports, globalisation and brand building under the automobile task force headed by the heavy industries ministry is in favour of a special fund to finance global acquisitions.

This fund can offer finance at preferential rates, which can be routed through banks as priority sector lending.

The task force is drawing up a 10-year mission for the automotive industry.

The sub-committee, headed by Deep Kapuria, former president of the Automotive Components Manufacturers Association, in a draft report has said that such a fund can assist companies in overseas acquisitions or investment.

The 10-year mission, that is expected to be announced in the middle of this year, will seek to put in place a comprehensive policy that can help India emerge as a global player.

Five sub-committees covering demand creation, globalisation, human resources, safety and emission, and technology, had been set up to help the task force come up with a long-term, holistic mission statement.

The sub-committee on globalisation has also sought special excise concessions for "made in India" products, or products that have over 90 per cent local content.

A change in the current policy for such concessions, that insist on goods being designed and developed by wholly Indian owned companies, is also being sought by the sub-committee.

The presence of a large number of multinationals as joint venture partners in most automobile companies will deny the benefits of the concessional duty, according to the report.

The recommendations have also highlighted some of the long overdue demands of the industry like virtual SEZs within existing manufacturing facilities, tax exemption on import of capital goods subject to export obligations and overall reduction in raw material duties to the MFN level.

The automobile industry has also sought customs duty exemptions on import of research and development equipment and tax exemption on R&D consultancy services.

The sub-committee has suggested that the industry and the government work out an annual calendar of international automobile shows for which part-funding can be provided by the government for both vehicle and component makers to ensure active participation.

The recommendations put forth by all the sub-committees are to be collated and the industry and government representatives will deliberate extensively in the coming weeks to frame the 10-year Mission.