Tough competition, higher taxes need immediate support-Industry
Chandigarh: Auto parts manufacturing industry in Haryana and Punjab having over 4000 units prooviding employment to nearly 50 lakh persons facing severe crisis due to increasing cost of production, tough competition among manufacturers, higher rate of GST now looking for government support for their survival. According to information, there are more than 4000 auto parts manufacturing units in Haryana and Punjab manufacturing auto parts and nut bolts used in automobiles doing business worth crores of rupees in the country as well as exports, in-spite of the fact more than 25% auto parts are being imported from China and nearly 60% automobile accessories being imported from abroad.
According to Guru Pargat Singh Kahlo, President Auto Parts Manufacturing Association of India, the government has proposed to impose a 25% duty on steel, which is basic raw material for manufacturing auto parts, which will be extremely harmful for the auto parts industry in the country already facing a crisis. Meanwhile, President of Apex Chamber of Commerce & Industry Ludhiana, Rajnish Ahula while talking to media persons said the replacement market of auto parts has witnessed 60% decline in demand at present with the arrival of modern range of automobiles introduced by the automobile manufacturers in the country. He demanded immediate reduction in GST on auto parts from 28% at present to 12% to keep auto parts industry alive, made available loans at lesser rate of interest, ease of doing business should be encouraged and GST refunds should be made at an early to this industry by the government providing employment to lakhs of people, besides having 7.1% share in country’s GDP.
Auto Parts manufacturers said that steel being the basic raw material used in manufacturing auto parts, the Union Government’s decision to impose 25% safeguard duty on steel will adversely affect the auto parts industry. They said, with the manufacturing of electronic automobiles in the country, auto parts industry is likely to be further squeezed since in petrol and diesel automobiles there is requirement of nearly 2000 spare parts in the engine, whereas electric driven automobiles would require hardly 20-30 types of spare parts and most of the auto parts manufacturers will be compelled to close down their manufacturing units and are worried over their future business.
