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Auto manufacturers fear further disruption with imports from China stuck at ports

Sumant Banerji     June 29, 2020

Reports of import consignments getting stuck at ports is making India's domestic automobile industry nervous.

India's $118 billion automobile industry is largely self-reliant but still depends on imports for a few critical components especially in electronics that are not produced on a large scale in the country. As a result, components worth around $4.75 billion are imported into the country every year and over a quarter of them are shipped from China. These consignments are reportedly being manually checked at the ports leading to a delay in supply at a time when factories have just started to open up.

"Inordinate delays in clearance due to congestion at port could eventually impact manufacturing of vehicles in India. The industry is piecing itself together as growth is limping back; any further disruption at this juncture is best avoided," said Rajan Wadhera, President, Society of Indian Automobile Manufacturers (SIAM).   

The hold up at the ports comes in the wake of relations between India and China getting strained after 20 Indian soldiers were killed in action on June 15. A clamour for a complete halt of imports from China has also become louder. However, the industry fears this may be counter productive in the short term.

"The auto component industry in India is committed to the 'Atma-nirbhar vision' of our Hon'ble Prime Minister. Some of the items imported from China are critical components such as parts of engines and electronics items for which we are yet to develop domestic competence," said Deepak Jain, President Automotive Component Manufacturers Association (ACMA).

"The automotive value chain is a highly complex, integrated and interdependent one; non availability of even a single component can, in fact, lead to stoppage of the vehicle manufacturing lines. Post the lockdown, production in the component industry is gradually picking up in tandem with growth in vehicles sales, it is therefore in the best interest of the industry and the economy that any further disruptions are best avoided."

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