KOLKATA: The draft Automotive Mission Plan (AMP) prepared by the Central Government in consultation with the industry, which aims at doubling the contribution of the automotive sector to GDP by 2016, lays special emphasis on export of small cars, auto components and multi-utility vehicles (MUVs) and favours creation of three export hubs near Mumbai, Chennai and Kolkata, each equipped to handle five lakh vehicles annually by 2015.

An investment of about Rs. 180,000 crore would be required by 2016 to achieve the targets set in the plan. On exports, the document says that this opportunity lies mostly in the small car segment and India should capitalise on this and target becoming a manufacturing hub for A and B class vehicles.

This is already being leveraged by OEMs like Hyundai (Santro), Suzuki (Maruti 800, Alto) and Tata Motors (Indica).

The industry's wish list includes bringing the sector under the incentive structure prevalent for power projects, EOUs for investment of over Rs. 500 crore, concessional import duty on machinery for new plant and preferential allotment of land by State governments as was being done for the IT sector.

The industry also recommends changes in labour laws, which, it feels, adversely impact competitiveness despite being a low labour cost economy. It wants exemptions from sections of the Factories Act, governing working hours per week, certain provisions of the Contract Labour (Regulation and Abolition ) Act and the Industrial Disputes Act.

The mission also felt the need for the Government to discourage import of used and remanufactured vehicles and components.

Explaining the need for the formulation of such a plan, the document says that the sector with its deep backward and forward linkages is a multiplier of industrial growth while creating substantial employment.

The sector's turnover is Rs. 165,000 crore in 2006 and exports have shown an average of 30 per cent compounded annual growth rate. But still the industry has a mere 2.37 per cent share in world production.

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