Is India Still Under China’s Dominance?

A recent report sparked a debate of increasing Chinese dependence over the Indian auto-industry. The report unfolds that the car manufacturers, including the domestic ones, are heavily relying on Chinese imports for building products. And a normal shut-down from China might cost the Indian auto segment a big heart-attack! What’s going on? Let’s discuss in detail. 
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India Under China’s Dominance?

Recently, Times of India reported that only 6 out of 46 electric vehicles sold in the country are eligible for the PLI scheme. For starters, the Government has brought in a PLI (Production Liked Incentive) scheme for the automakers. This is majorly to boost domestic manufacturing of advanced automotive technology (AAT) products, such as electric and hydrogen fuel cell vehicles and their components domestically. It helps car manufacturers by providing financial incentives. These incentives will help the manufacturer to keep the cost of models low, benefitting the customer. 

However, it’s shocking that only 6 cars out of nearly 46 cars manufactured in India qualify for this scheme. The cars that qualify for it include – Tata Punch EV, Tata Tiago EV, Tata Tigor EV, Tata Nexon EV, Tata Harrier EV and Mahindra XEV 9e. 

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Unfortunately, the Mahindra BE 6 and Tata Curvv EV failed to meet the localisation criteria despite their manufacturers having other approved models. Alongside these, several manufacturers including JSW MG, Citroen, Vinfast, Hyundai, Kia, BMW, Mercedes-Benz and others were found to contain over 60 percent of imported components.

Imports From China

The EV makers are found to have heavy imports from China and Taiwan. The component imports include lithium-ion battery cells, rare earth magnets, DC motors, laminated stators, semiconductor chips, PCBs, electronic child parts, connectors, contactors, relays and others.

Now, as recently we saw a global shut-down of rare earth magnet exports from China stumbled the Indian auto industry. The domestic car makers should try to invest more in developing or building the components internally. Eventually, this will result in less dependence on the neighbouring countries, as well as keeping the production cost low – and this benefit can be passed on to the final buyer.

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