As the Indian government prepares for the Union Budget 2024-25, key industry bodies representing the automotive sector have outlined their expectations and recommendations to support the industry's growth and sustainability. These bodies include the Society of Indian Automobile Manufacturers (SIAM), the Automotive Component Manufacturers Association of India (ACMA), the Federation of Automobile Dealers Associations (FADA), and the Automotive Tyre Manufacturers' Association (ATMA).
Vinod Aggarwal, President of SIAM, expressed optimism about the government's initiatives to bolster the Electric Vehicle (EV) ecosystem. 'The announcement on strengthening the EV ecosystem by supporting manufacturing and charging infrastructure will boost the development and adoption of EVs in the country. Additionally, the encouragement of a Payment Security Mechanism for the adoption of e-buses for public transport networks is a welcome step,' said Aggarwal.
ACMA has submitted several key measures to the Ministry of Finance and the Ministry of Heavy Industries to strengthen the auto component sector further. These measures include reintroducing additional investment allowance provisions, increasing depreciation rates on plant and machinery from 15% to 25%, and rationalising GST rates on EVs and their components. ACMA also requested clarification on tax deductions under Section 194R and proposed an amnesty scheme for resolving legacy disputes under customs laws. Shradha Suri Marwah, President of ACMA, highlighted the industry's hopes for a growth-oriented budget with a continued focus on reforms and infrastructure development. 'Schemes such as the PLI have been of great support to the automotive industry, and we are hopeful that such measures will be continued,' Marwah stated.
FADA, represented by its President, Manish Raj Singhania, has strongly appealed to two key measures. Firstly, FADA urges the Finance Ministry to introduce benefits for individuals paying income tax by allowing them to claim vehicle depreciation. 'Allowing individuals to account for depreciation will not only increase the number of income tax filers but also ignite automobile demand,' Singhania explained. Secondly, FADA requests a reduction in corporate tax for LLPs, proprietary, and partnership firms, extending the benefits currently enjoyed by private limited companies to these entities, which form a significant part of the auto dealership community.
ATMA has raised concerns over the increasing import of waste tyres into India, which has grown more than fivefold since FY20-21. Arnab Banerjee, Chairman of ATMA, warned that India is becoming a dumping ground for waste tyres, posing environmental and safety risks. 'There is enough domestic End of Life Tyre (ELT) capacity available in the country. The import of waste/scrap tyres needs to be restricted through policy measures and, if necessary, allowed only in multiple cut or shredded form,' Banerjee urged. ATMA also called for duty-free imports of natural rubber to the extent of the domestic demand-supply gap and removing port restrictions and pre-import conditions on natural rubber imports. Furthermore, addressing the inverted duty structure and reducing the GST rate on key raw materials would enhance the industry's competitiveness and support value addition in the domestic tyre sector.
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