Require long-term regulatory roadmap to increase automobile sector contribution to GDP
A long-term regulatory roadmap is required for the automobile industry to grow and increase its contribution to GDP to 12 percent from the current 7 percent, according to a report by Nomura Research Institute Consulting and Solutions India (NRI India).
While the government plans to bring Indian automotive industry at par with developed nations in safety and emission regulations, the report said there is a need to study regulations in Indian context as conditions in the country are different from developed nations in many aspects.
“The Indian automotive industry has kept pace with these changes and in recent years has undergone a number of changes in the domain of passenger safety, emission control and connected technology.
“One such highlight is leapfrogging from BS-IV to BS-VI emission norms and hence achieving parity with Euro emission norms,” the report said.
In addition to the positives these changes have brought to the Indian market, they have also brought the Indian automotive industry at par with the developed regions like Europe, Japan and the USA.
Further, the much-needed amendments to the Motor Vehicle Act (MVA) had been commendable steps by the government of India, it said.
“However, there have been many instances where regulations are enforced without adequate lead-time and deliberations. It may be important to study the regulation formulation process adopted by global agencies and take learnings for deciding timeline and lead-time for regulation implementations,” it said.
The NRI India report further said that for fulfilling the government’s GDP targets, the auto sector will be playing a pivotal role by increasing its contribution to GDP to 12 per cent from current 7 per cent.
“In this journey for ensuring growth, interests of young and aspirational consumers from various strata of the society need to be kept in mind,” it added.
The report said the government intended to implement some future regulations to keep pace with the developed countries in terms of emissions, fuel economy and safety.
“However, in the absence of a clear roadmap, it becomes extremely challenging for the industry to adopt new technologies and comply with regulations at an affordable cost. A holistic long-term roadmap will not only help the industry to prepare well for the future but also help attract investments for local development of technology in India to promote #AatmaNirbharBharat mission,” it said.