Automobile and Auto Components
Overview of India
17.5 million
vehicles per year
Average annual production of vehicles in India in 2013-14
of manufacturing GDP
of India came from the automobile industry in 2013-14
₹7,68,000 crore
(US $ 115 billion)
Estimated turnover of Indian auto component industry by 2020-21 (USD 39.7 billion in 2013)
of GDP of India
comes from auto components industry that provides employment to ~19 million people.
World’s largest manufacturer of motorcycles
13.5 million vehicles
Fifth largest commercial vehicle manufacturer in the world
0.7 million vehicles
₹61,816 crore
(US $ 10.11 billion)
Cumulative Foreign Direct Investment (FDI) inflow into the Indian automobile industry from April 2000 to August 2014
₹61,487 crore
(US $ 10.02 billion)
Worth of exports of auto components in 2013-14
Largest expected automotive market by volume, globally
The Indian automobiles sector is categorized into four different sub sectors:
Destination Andhra Pradesh
₹12,229 crore
(US $ 2 billion)
Potential for investments in the automobile industry in Andhra Pradesh
Over 100
auto component manufacturers
Present in the state specializing in various auto components such as gears, pistons and axles
Over 50%
of cylinder liners and clutch plates in India are being produced in Andhra Pradesh
Excellent Ecosystem
2 auto clusters proposed in Pottisriramulu Nellore and Chittoor districts to cater to the needs of the automotive companies
Abundant high quality supplier base
Automotive supplier manufacturing clusters planned to provide ‘plug and play’ business environment to potential incumbents
Excellent ports logistics
Existing cargo handling capacity 250 MMT
Industrial corridors
under advanced development
in ease of doing business
by World Bank
Excellent logistics and reliable infrastructure available
Skilled labour workforce available
Drivers of Growth
FDI allowance
Significantly low cost of Steel
Higher disposable income
Projected increase in the working-age population in India
Key Policy Targets
₹20,000 crore
(US $ 3 billion)
worth of investments in the sector by 2020
new job opportunities to be created in the sector by 2020
Key Fiscal Incentives
Capital subsidy

Capital subsidy for Auto Clusters and ASMC developers – 50% of fixed capital investment in building and common infrastructure (maximum of ₹20 crore)

Patent cost

75% reimbursement, subject to a maximum of ₹25 lakh

Quality certification

50% reimbursement, subject to a maximum of ₹5 lakh for MSME units

International fairs

50% reimbursement of cost of participation in international fairs upto ₹5 lakh

Special incentives for mega integrated projects:
  • 100% CST reimbursement for 10 years or GST regime, whichever is earlier
  • Gross VAT/SGST reimbursement on sale of finished goods for 20 years, or 150% of capex spent in first 7 years, whichever is earlier
  • Concessional VAT/SGST rates on input & capital goods @ 5%, and reimbursement of state VAT/SGST of input credit for 20 years
  • 75% reimbursement of Gross VAT/SGST for 10 years from the date of commercial production,or 100% of capex spent in first 7 years, whichever is earlier
Other taxes and duties

No entry tax and octroi duties; reimbursement of stamp duty, transfer duty

Water supply

50% of the price of existing industrial supply tariff for the initial 5 years

Ashok Leyland
Bharath Forge

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Ambedkar Miriyala