The filing of applications and consequently signing a memoranda of understanding with the DGFT is crucial for automobile ventures to operate and streamline business in the country. The revised auto policy, which was announced in November, had laid down certain parameters which are to be met by the automobile companies which are already operating in the country, and also for those planning to enter the market.

Earlier, the companies obtained an import licence from the DGFT for bringing in CKD/SKD kits and their requests were met on a case-to-case basiswith no clear parameters.

The existing car MoUs were signed on the basis of individual project assessment. Sources said that the companies' applications are more or less in conformity with the new policy, and they have taken into account the parameters while framing the proposal. Honda Siel Cars, sources say, in its application has submitted criteria such as production, capacity of their Noida plant, investment schedule, foreign investment and the crucial indigenisation level -- as sought in the policy.

The DGFT had later sought some more information from the company. Though there was some confusion regarding the method of calculating the indigenisation on a particular car project, Honda Siel has gone according to the formula laid down by the erstwhile DGTD. Honda Siel Cars India Ltd expects to achieve an indigenisation level of 50 per cent by the end of the first year.