“To emerge as the destination of choice in the world for design and manufacturing of automobiles and auto components with output reaching a level of US $ 145 billion, accounting for more than 10 per cent of the GDP and providing additional employment to 25 million people by 2016.” This is the vision of the Automotive Mission Plan 2006 - 2016 drafted by the Ministry of Heavy Industries and Public Enterprises department of the Government of India.
This gives you an idea to the magnitude of a single industry being able to contribute as much as 10 per cent of the gross domestic product for a country like India. As of 2013, the Indian automobile industry had contributed to almost 7 per cent of the country’s GDP. During the time it provided 22 per cent of India’s manufacturing GDP and provided around 18 per cent of excise duties to the state exchequer. The Indian automobile industry has also significantly increased the presence of the nation in international markets with a year-on-year increase in exports of approximately 18 per cent.
While the above mentioned statistics have undoubtedly taken the country’s economy forward, the Indian automobile industry has indeed taken its people forward as well by creating nearly 19 million jobs in the country through both direct as well as indirect employment. The Indian automobile industry is responsible for employing 7 to 8 per cent of India’s total employed population as of 2013. Automotive hubs across the country have given rise to ancillary industries engaged in manufacturing components for automobiles and more. This has resulted in the development of new urban settlements with civic amenities for healthcare and education, thereby bettering life style as well.
The research and development sector in India has also been complimented well by the automobile industry here through localization and indigenization of technology for the industry. Multiple tie-ups and alliances with multinational companies to gain technical know how has fast tracked technological development and growth for India.
With a significant number of car makers already present in India and more of them looking to enter the market in the future, the potential of the Indian automobile industry is immense in terms of both revenue generation and employment. While the industry has gone through a slowdown off late, what car makers are now looking forward to are reduction in duties and taxes along with the incorporation of a centralized Goods and Service tax norm that will not only streamline tax norms to make life easier for companies but also boost the industry as a whole.
Source : CarDekho