Central Government has announced that over the next five years, the effective execution of planned interventions—ranging from skilling and infrastructure to R&D and global partnerships- will determine whether India becomes a hub for high-value auto components or remains a low-cost player in traditional segments.
Proposed Interventions for GVC Integration
Fiscal Measures:
- Operational Expenditure (Opex) Support: To scale up manufacturing capabilities, with a focus on capital expenditure (Capex) for tooling, dies, and infrastructure.
- Skill Development: Initiatives to build a talent pipeline critical for sustaining growth.
- R&D, Government facilitated IP transfer and Branding: Providing incentives for research, development, international branding to improve product differentiation and empowering MSMEs through IP transfers.
- Cluster Development: Fostering collaboration between firms through common facilities such as R&D and testing centers to strengthen the supply chain.
Non-Fiscal Reforms:
- Industry 4.0 Adoption: Encouraging the integration of digital technologies and enhanced manufacturing standards to improve efficiency.
- International Collaboration: Promoting joint ventures (JVs), foreign collaborations, and free trade agreements (FTAs) to expand global market access.
- Ease of Doing Business: Simplifying regulatory processes, worker hour flexibility, supplier discovery & development and improving business conditions for automotive firms.
