Hailing the new foreign trade policy, the automobile industry on Friday said it would help enhance exports and India to become a significant player in global trade.
SIAM President Vinod Aggarwal said the auto industry would substantially benefit from the policy with measures such as self-certification of origin, reduction of the threshold for status holders of exporters, enabling rupee payment and reduced export obligation under the EPCG (Export Promotion Capital Goods) scheme for electric vehicles.
"These measures will go a long way in propelling automobile exports from India, as Indian vehicle manufacturers are increasingly focusing on widening their exports footprint," he said in a statement.
Auto components industry body ACMA President Sunjay J Kapur said the policy is another step towards a digitally enabled Aatmanirbhar Bharat, coupled with measures that will drive India to become a significant player in the global trade.
"Focus on continuity of remission of taxes, ease of doing business, technology-led enhanced trade facilitation, promotion of exports through e-commerce, and wider engagement with states and districts to foster exports are indeed steps that will help us achieve the target of $1 trillion in exports by 2030," he added.
Significant reduction in the application fee for advance authorisation and EPCG Scheme for MSMEs is another welcome step as a majority of the exporters in the automotive supply chain are smaller enterprises, Kapur noted.
That apart, the addition of BEVs (battery electric vehicles) and green hydrogen to the list of 'Green Products' will allow them to avail of reduced export obligation under EPCG Scheme, adding to the sustainability initiatives of the government, he added.
The auto components sector reported a turnover of $56.5 billion in FY22 with exports of $19 billion.
Exports grew 43 per cent over FY22, recording a trade surplus of $700 million.
In the first nine months of FY23, despite several geo-political challenges and recessionary headwinds in key markets, auto components exports have been well on track, clocking $15.1 billion, ACMA stated.
India on Friday came out with a foreign trade policy with the objective of raising the country's outward shipments to $2 trillion by 2030, making the rupee a global currency and incentivising e-commerce exports.
The approach of Foreign Trade Policy (FTP) 2023 is to move from an 'incentive to remission' based regime; encourage collaboration between exporters, states, districts and Indian Missions; reduce transaction costs; and develop more export hubs.
India is likely to cross $765 billion in merchandise and services exports in the financial year 2022-23, which ends on Friday. The total exports were $676 billion in the previous fiscal.
Unlike the practice of 5-year FTPs, this time the government has come out with a dynamic and responsive trade policy without any end date and will be updated as per the emerging global scenario.