Trade and Industry Minister Piyush Goyal on Friday called on car companies present in India to reduce royalty payments to their parent companies as it would help them weather the crisis with ease.
The minister said this while addressing the annual convention of the Society of Indian Automobile Manufacturers (SIAM).
He said automakers that own a sizable chunk of the country’s auto market pay “millions of dollars in royalties” to their parent companies. Lowering royalties can help them reduce cash outflow, lower vehicle prices and help boost their domestic sales, he added.
“Goyal asked the automotive companies present in the country to ask their principles to reduce royalties. Reducing this could help the Indian units of these companies to come out of the crisis with ease,” an official statement said, citing the minister.
The royalty is paid to a foreign collaborator for the transfer of technology, use of brand or trademarks.
Goyal also said: “Should it be advisable that we have a gradual increase in import duties, to encourage more and more auto companies, especially newer ones that are coming with fully detachable kits or semi-trailer and just assembling in India? We are open to suggestions from the industry as a whole. ”
He said that certain problems such as tariff and non-trade barriers imposed by other countries hamper India’s auto exports.
Citing examples, he said countries like Australia have certain import tariffs and Indonesia sets import quotas.
“We are working to resolve the issues … With Australia, we have a good dialogue. I have raised the matter with Indonesia. The industry should have fair access,” he said.
On the subject of Quality Control Orders (QCO), Goyal said that these should not be seen as barriers.
“It is time for India to start looking for quality control and provide the world with high quality products. Once we have quality consciousness in the country as a whole, we will transform the future of India, and that is the endeavor. what are we doing”. added.
He also said that to help the auto industry with affordable logistics options, Indian Railways is ready to reduce the freight rate.
Automakers should find innovative financing options, which would attract financiers to lend money, as well as buyers.
He added that to help the automotive sector, especially exporters, the government will be happy to introduce innovative credit guarantee schemes.
“India is willing to provide a very enabling environment for companies, looking for a more reliable business partner and a better supply chain. We have to look at the sectors where we have the advantage over other countries,” Goyal said.
In addition, he said: “We are committed to many companies looking for more resilient value chains. We have to identify the sectors in which we have a comparative and competitive advantage over other countries.”
This story was published from a news agency feed with no changes to the text. Only the title has been changed.
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