Indian government is allowing 100% Foreign Direct Investment (FDI) through the automatic route in the auto components sector, subject to all the applicable regulations and laws given.
India is an emerging global hub for sourcing auto components.
It has the advantage of being geographically closer to key automotive markets like the ASEAN, Japan, Korea and Europe.
Being the third largest producer of steel in the world it gives a huge competitive advantage.
The presence of a large pool of skilled and semi-skilled workforce and a strong educational system provides abundance of resources in the form of labour and knowledge.
There has been a significant increase in R&D operations and laboratories. These are being set up to conduct activities such as analysis, simulation and engineering animations.
Reduction in excise duties in the motor vehicles sector will spur demand for auto components.
The government has reduced the excise duties in the motor vehicles sector. This has resultantly increased the demand of automobile components.