PLI Scheme: Minda Industries’ Suggestion To Bring Rs 1 Lakh Crore Business Home
India’s auto parts makers need economies of scale to achieve import substitution and export prowess as intended by the government’s incentive scheme and Atmanirbhar Bharat resolution, according to NK Minda.
India imports auto components worth Rs 1 lakh crore every year, the chairman and managing director at Minda Industries Ltd. told BloombergQuint’s Niraj Shah in an interview. This business, he said, can be brought home if the government coordinates with the automobile and auto ancillary industries. If corporate India can work with the government to improve employment, investment and localisation, “then we can make a good win-win situation”, he said.
Countries like China have economies of scale and often dump products in India because they get benefits on raw materials, Minda said. If the Indian government were to restrict imports and say it will only be allowed for another two-three years, India would build economies of scale too, he said.
If there is an economy of scale in manufacturing, there’s a win-win situation.NK Minda, Chairman & Managing Director, Minda Industries
The Indian government on Nov. 11 extended its Rs 1.46-lakh-crore production-linked incentive scheme to 10 sectors, including automobile, solar panel and specialty steelmakers over a five-year period. Textile units, food processing plants and specialised pharmaceutical product makers are also eligible.
The highest amount of Rs 57,042 crore was allocated to provide incentives to the automobile and auto components industries. Nomura has also listed select auto and auto parts makers that are potential beneficiaries of the incentive scheme.
Watch the full conversation here: