India Poised to Emerge as Global Automobile Manufacturing Hub: Piyush Goyal

Commerce and Industry Minister Piyush Goyal on Monday said India is poised to become a global hub for car manufacturing, asserting that European automakers would increasingly prefer to produce vehicles in the country amid regulatory constraints in Europe.

Speaking at The Dilli Dialogue, Goyal said stringent regulations in Europe could make vehicle manufacturing uncompetitive, prompting manufacturers to explore India as a production base.

“Finally India is going to become the global hub for car manufacturing. Everybody is going to come and manufacture in India,” he said, adding that European manufacturers would find it difficult to remain competitive under the region’s regulatory framework.

India has offered quota-based tariff concessions to the United Kingdom and the European Union under free trade agreements. The India-UK agreement came into effect on July 15, while the India-EU trade deal is expected to be signed by the end of this year.

Goyal cited Tata Motors’ experience following its acquisition of Jaguar to illustrate the challenges faced by automobile companies operating in international markets. He said Tata Motors encountered considerable difficulties after acquiring the British luxury carmaker and undertook extensive restructuring, including shifting production of some models to India, before eventually becoming profitable.

The minister did not specify which European regulations could affect automakers’ competitiveness. However, India and several other countries have raised concerns over the European Union’s Carbon Border Adjustment Mechanism (CBAM), which imposes a carbon-related cost on certain imports.

On the country’s export outlook, Goyal said the government was targeting USD 1 trillion in exports of goods and services during the current financial year. He said both exports and imports were expanding, reflecting opportunities for domestic industries and international investors.

During April-August of the current fiscal, India’s exports increased 17.85 per cent year-on-year to USD 215.91 billion. Imports rose 18.21 per cent to USD 363 billion during the same period, according to the figures cited in the report. The government is seeking to strengthen India’s position in global manufacturing and trade through market access, investment and export growth.