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Most prominent sector of Indian Economy: Automobile Sector

Automobile sector in India is one of the largest sectors as compared to another country under the same segment. It is quite to acknowledge that the India account most of the major automobile manufacturing companies like Baja Auto, Hero MotoCorp, Yamaha, Suzuki, and much more. The sector accounts 7.1% of the total country’s GDP and hence, it is one of the most important parts of the Indian economy. The reason why the sector has been one major contribution towards country’s GDP is that the majority of the country’s total population considered as the middle-class people. Hence, with the population of 1.333 billion the sector accountability for the employability is higher than any other industry. It also plays a crucial role in the export accounting something around 4.3% of the India’s total exports with the credibility of 13% of the total excise revenues.

Division of Automobile sector in India

In order to make it differentiable the country has divided the sector into four major parts:

• Two- Wheelers: includes mopeds, scooters, motorcycles, and electric two-wheelers (80% of the market share)
• Passenger Vehicles: includes passenger cars, utility vehicles, and multi-purpose vehicles (14%)
• Commercial Vehicle: light and medium-heavy vehicle (3%)
• Three Vehicles: passengers carriers and goods carries vehicle (3%)

Facts relating to boosting the sector: 

After, making the 100% FDI with no minimum investment criteria the sector has drastically attracted some of the global leader of world class auto manufacturing companies like Mercedes Benz, KTM etc. The sector also enjoys the incentives which are up to 150% under the section 35 (2M) of the Income Tax Act. Besides this, there are incentives like Export Incentives, Area Based Incentives (especially for the critical region like Jammu & Kashmir, Uttrakhand, North East and Himachal Pradesh).

The automobile sector has seen a considerable increase after the launch of the initiatives called “Make in India. This initiative has made the investment in this sector more viable and reliable. Under this Initiative, the sector has been instructed to introduce a policy which could the sector to further upper level.

Policies helm by the sector: 

• Auto Policy: includes automatic approvals for FDI up to 100%, exempt from licensing and approvals, rebates on R&D)
• Automotive Mission Plan (2016-2026)
• National Automotive Testing and R&D Infrastructure Project (NATRiP)
• The National Electric Mobility Mission Plan (NEMMP) (2020)
• BS VI Fuel Compliant Vehicle by April 2020

The importance of BS IV Fuel Compliant: 

With increasing Automobile users in the country the Government had introduced the initiative of Bharat Stage Emission Standard (BSES) which aim is to:
• Regulate the air pollutants from internal combustion engines and spark ignition engines
• Reduce the violent effect on the environment
• Reduce the diseases caused by the air pollutants

The BS norms are basically taken from the Euro norms in order to set the limits for air pollutants. In India, all the vehicles are produced under the tag of BS IV fuel compliant vehicle and further have jumped to manufacture BS VI fuel compliant vehicles by April 2020.

By, this persuasive activity to manufacture vehicle by protecting the environment is the great move to set up a higher level for the sector and hoping to make it one of the major sector in India.