Draft National Auto Policy

Why in news?

The Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises has recently released the draft National Auto Policy.

What are the objectives?

• The policy envisages propelling India as an automotive industry amongst the top three nations in the world.
• This is in terms of engineering, manufacturing and export of automotive vehicles and components.
• It aims at making India a globally competitive auto R&D and manufacturing hub.
• It also intends to make the automotive industry a major contributor to the country's manufacturing sector GDP.
• It is also to aid achieving the targeted objectives of green mobility.

What are the key provisions?

• Import duty - The Policy proposes lowering of import duties.
• This applies to capital goods, equipment and machinery for manufacture of new technology components.
• Companies will have to declare at the beginning of every financial year the volume of prototypes planned to be imported.
• The import duty exemption to companies will be given only on this pre-declared volume.
• Green Mobility - The policy emphasizes fast-tracking widespread adoption of green mobility in India.
• It calls for mandating a minimum share of green vehicles among those purchased by the government and municipal agencies.
• Accordingly:

1. central and state governments - 25% from 2023 and 75% from 2030
2. municipal corporations in metros - 50% from 2023 and 100% from 2030

• Emission - The policy eyes adoption of a long-term roadmap for emission standards.
• It proposes to define emission standards that will be applicable after BS-VI.
• The standards will be with a target of harmonizing them with the most stringent global standards by 2028.
• Introduction of new norms will be initiated in 2026 with a 2-year phase-in period.
• It also envisions the Corporate Average Fuel Economy (CAFE) norms till 2025 and beyond.
• These norms are for improving the average fuel economy of vehicles, and fix incentives or penalties.
• GeM portal - The draft policy suggests utilising the Government e-Marketplace (GeM) portal.
• This is to aggregate all green vehicle orders with standard specifications and enable bulk procurement.
• Infrastructure - The policy recommends conducting a detailed study on requirement of public infrastructure for green vehicles.
• This is to make the necessary infrastructure investments for green mobility.
• Skill development - The policy proposes improving the skill development and training eco-system.
• It advocates increasing the accountability of Automotive Skills Development Council (ASDC) to achieve this.
• Performance based funding is suggested as a measure.
• Performance metrics include incremental employment generated, level of employment, curriculum coverage, etc.
• Employment - The draft policy suggests ASDC to implement a Labour Market Information System (LMIS).
• This is to facilitate aggregated information of certified candidates.
• It also serves as a marketplace to match demand and supply of skilled labour.
• It thereby helps boost employment creation in the sector.
• Investment - The policy entails incentivising Public Private Partnership (PPP) based industry investments.
• This is particularly for research and development of commercially viable technologies through a Hybrid Annuity Model (HAM).
• The policy also calls for encouraging FDI in the country's Automobile sector.
• This is proposed to be in coordination with Invest India to attract investments in identified areas.
• Initiating trade pacts with countries with attractive markets for Indian automotive exports is also called for.
• Besides, the draft auto policy also suggests setting up of a 'technology acquisition fund'.
• It proposes creation of a nodal body with a two-tier structure having an Apex Body supported by the National Automotive Council (NAC).
• The apex body will have government representatives as well as stakeholders nominated from the industry and academia.

Source: Business Standard, Economic Times