Association Interview

India: Driving to New Horizons

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How are SMEs contributing to this growth?

Balaji: The auto component industry in India is largely dominated by SMEs; in fact, 70 percent of ACMA members consist of SMEs. ACMA has taken several initiatives to ensure that the auto components stays competitive, some of these are illustrated below:

ACMA signed an MoU with SIDBI to support its MSME members to avail credit at reduced rate of interests. To ensure timely technological advancements within the SMEs the ACMA Centre for Technology (ACT), a technical wing of ACMA, has helped upgrade process technology within the membership in over 500 plants across the country, making them world-class. Today, ACT runs several cluster programs such as the Foundation, Basic, Advanced, Engineering Cluster programs and the New Product Development Cluster. ACT also runs a special cluster program for SMEs like ACT MSME Lean Cluster and ACT MSME Advance Cluster. Each cluster program has a distinct road map where the best practices are imparted right from the shop-floor to the top management.

Furthermore, to help upgrade the capabilities of the SMEs in Tier 2 and Tier 3 cities, ACMA has launched the ACMA–UNIDO cluster program with support from the Department of Heavy Industry, Government of India.

According to you, how will the auto ancillary expand in the coming years?

Balaji: The component industry, over the years has adapted well to the changes in the policy and regulatory environment and the needs of our customers. I would also like to point out the need for the industry to develop its own IP and build scale through significant export growth and domestic consolidation. The industry needs to graduate from being a build to print to one that is art to part and support from the government would be critical.

I am confident that by 2026, the component industry will meet the targets defined in the Automotive Mission Plan 2026—turnover of $200 billion, with exports and domestic market each reaching $100 billion in size. This calls for an additional capital investment to the tune of $80 billion, which demands the industry to focus on better returns on capital.