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Modi's 'Make In India' A Casualty As Steel, Auto Firms Spar Over Sourcing

The steel ministry in August announced stringent import rules for some high-grade steel products that are sourced by carmakers from countries such as Japan and South Korea but not yet manufactured in India.

Photo Credit : Reuters

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India’s steel ministry is putting pressure on automakers to use locally made steel by refusing to back down on tougher import rules despite warnings that the new regulations could disrupt the production of cars, government and industry sources said.

The steel ministry in August announced stringent import rules for some high-grade steel products that are sourced by carmakers from countries such as Japan and South Korea but not yet manufactured in India.

India’s auto industry, which includes companies such as Maruti Suzuki, Hyundai Motor Co, Honda Motor Co, and Ford Motor Co, is staring at production stoppages if new tougher rules on steel imports are not relaxed, a federal minister warned in a letter.

“The shipments of the auto component industry have started getting impacted which possess the significant risk of production stoppage of the whole automobile industry in the immediate future,” Anant Geete, heavy industries minister, said in the Jan. 4 letter to steel minister, Chaudhary Birender Singh.

“There is also a risk that if the import of steel (raw material) is restricted, then the industry may go for import of the components itself which may affect the government initiative of ‘Make in India’,” Geete said.

The new rules are expected to come into effect on Feb. 17.


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