Norms eased for importing vehicles for R&D

FOREIGN TRADE POLICY/ SECTOR-WISE ANALYSIS AND ASSESSMENT

In a move that will give a shot in the arm to India's booming $10-billion automobile component industry, the government has eased the norms for companies to import vehicles for research and development.

This will mean that component makers can import vehicles without going through the lengthy and cumbersome homologation process.

"We shall now allow import of new vehicles by auto component manufacturers for R&D purposes without homologation," Commerce and Industry Minister Kamal Nath said today while unveiling the Foreign Trade Policy.

Homologation certification by the Automotive Research Association of India (ARAI) is required in the case of import of any vehicle or commercial launch of any vehicle in the country.

This will also help international auto component majors in setting up designing and manufacturing shops in India in a major way. They can now import car models for research and development, without going through the homologation process.

It is also expected that the sector, which has so far seen investments of $4 billion, will see an increased investment flow.

Sona Steering Chairman Surinder Kapoor said, "This is an excellent idea. It will give a huge benefit to the country's auto component sector. This will also help us align with the global market." It is expected that with this move, companies can freely import vehicles and develop products and components to suit their requirements.

"After this we can approach the vendor with our own products, which will be cost effective and of high quality," said Kapoor.