Auto industry raises concerns over proposed changes in import laws

New Delhi: The automobile industry is concerned over a proposal by the government to allow imports of up to 2,500 units without the need for adapting to Indian regulations, according to sources in the sector.

The Ministry of Road Transport and Highways in June had sought feedback from stakeholders to amend the Central Motor Vehicles Rules for allowing import of right-hand drive vehicles with compliance certificate from the country of origin.

The move would allow import of maximum of 2,500 completely-built units or semi-knocked down kits each year.

The vehicles could be shipped in by the manufacturers or their authorised representatives.

Currently, the government allows such imports only of cars which are priced over USD 40,000 and bikes which are above 800 cc engine capacity.

In normal practice, imported vehicles for sale in India have to undergo homologation process to conform with the Indian regulations, including safety and emission norms.

"The problem with this move is that any kind of vehicle -- a bus, truck, car -- can be brought into the country. With this, units could be brought from anywhere including China and it could impact various segments which are already reeling under low offtake," an industry player, who did not wish to be identified, said.

The move is against the spirit of 'Make in India' as it would encourage foreign manufacturers to import products into the country, he added.

When contacted, Society of Indian Automobile Manufacturers (SIAM) Deputy Director General Sugato Sen said while relaxing import conditions for a limited number of vehicles for R&D and scientific purposes is understandable, 2,500 could be a large number for certain segments of vehicles which is not very desirable to come under relaxed norms.

Analysts, however, had a different opinion.

Grant Thornton India LLP Partner Saket Mehra said the government move would help global OEMs to have hassle-free certification of vehicles in India.

"This is a step to simplify business, save time and effort spent on homologation, help foreign auto manufacturers evaluate India's auto market and firmly decide in local manufacturing," he added.

It may also boost the launch of new models and alternative powertrains in the country, Mehra said.