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Economic Survey lauds auto industry
July 07, 2004 14:05 IST
The pre-Budget Economic Survey on Wednesday complimented the Indian automobile industry for the success on the export front, which led a large number of foreign automakers to use India as production base either directly or through joint ventures.
"The liberalisation of norms for foreign investment and import of technology for manufacturing of vehicles, permission of 100 per cent foreign direct investment under automatic route in this sector, have helped it to restructure, absorb new technologies and get integrated into global production chains," it said.
Economic Survey 2003-2004: Complete Coverage
Total vehicle production grew by 15.1 per cent at 72.2 lakh (7.22 million) units during 2003-04 over 62.7 lakh (6.27 million) units during the previous year with India joining the club of 1-million car producing countries of the world.
Exports, which played a crucial role in the development of domestic automobile industry, posted a massive 56 per cent growth at 479,000 units during the last fiscal over 2002-03.
A major development in Indian manufacturing had been the success in exports of auto components and finished vehicles, the Survey said.
Elaborating on auto component exports, which had been a major success story, it said they increased 30.1 per cent in value terms to Rs 4,550 crore (Rs 45.50 billion) during 2003-04.
"A host of major international automobile companies are increasingly harnessing India as a production base, either directly through FDI or indirectly by contracting with firms operating in India," it said.
The growth was mainly assisted by an eight per cent reduction in production tax from 32 per cent to 24 per cent in the last Budget.