A Jab For Localisation

The auto industry has sought Government intervention to boost the prospects of 100 per cent localisation, writes Manav Kapur, Executive Director at Steelbird International.

- Manav Kapur

Localisation refers to the practice wherein different components of the vehicles are manufactured within the country where the vehicle is meant to be sold. A 100 per cent localisation within the automotive sector would be an aspirational dream in tandem with the ‘Make in India’ vision programme led by Prime Minister Narendra Modi. The Indian automotive industry has gained momentum since early January 2021. The auto components industry alone is expected to reach the USD 200 billion revenue mark by 2026. A pillar of the industry, the auto component, and ancillary suppliers are expected to play a key role as a vital cog of the wheel. However, India’s auto component manufacturing sector is yet to realize its true potential. It is not because of challenges limited to the technology but production costs that continue to be a major concern area.

While the whole nation is focusing on an ‘Atma Nirbhar Bharat’ or self-reliant India, it is an opportunity for many sectors with an exception of contretemps, a minor dispute or disagreement for a few others. The Government has urged auto components manufacturers in the country to increase localisation levels to 100 per cent. It has urged the stakeholders to provide a push especially to the local manufacturers in a bid to bolster the domestic supply chain and thereby strengthen the core of the automotive industry. As many Indian auto component manufacturers aim to cut their import dependencies, it is a mammoth process and one easier said than done.