Govt Warns Of Serious Action If Auto Companies Stop Component Suppliers From Manufacturing Locally

The government has warned auto companies operating in India of serious action if they force component manufacturers to import from preferred suppliers in areas where localisation of the product is possible.

“In case any auto company is pressurising any auto component manufacturer to import the components instead of localising them, when they have the technologies by which they can localise, I would urge you to please come straight to me and talk without hesitation,” Union Commerce and Industry Minister Piyush Goyal said at the annual conclave of the Automotive Component Manufacturers Association (ACMA).

"If any company, Indian or International, is forcing you (component makers) not to localise and import from a certain set of their own suppliers, I am happy to take cudgels on your behalf," he added.

The minister said that it was brought to his attention that some auto ancillaries, who have joint ventures with foreign firms, were facing pressure from their partners.

“This is a matter that the government will take and view very seriously and if at all any joint venture partner is unhappy, he's free to leave. I'm sure our Indian companies will be in a position to give them a fair and honourable exit,” he said, reports Economic Times.

Goyal said that if the Indian firms were being forced to agree to unfair terms, the government would take up the matter with its foreign counterparts.