Burdened with soaring input costs and stiff competition from China, the Indian auto component industry has sought the government's express intervention in abolishing customs duty on alloy steel and withdraw export incentives on the specific grades of the metal to render it competitive.

In a letter to the steel ministry recently, the Automotive Component Manufacturers Association of India (ACMA) has pointed out that the alloy steel prices have been rising at alarming rates for the past few months, which has adversely impacted competitiveness of the inflation-hit auto component industry. Pointing out that alloy steel is one of the major input for the industry, ACMA asked the ministry to take up the matter with the finance ministry to take special steps to reduce the unabated price rise in all segments of the metal.

ACMA said the government's decision to abolish customs duty on non-alloy steel and suspending Duty Entitlement Pass Book (DEPB) benefits on this steel has not helped the auto component industry, as these measures did not cover alloy steel. It cited that various auto components and systems such as drive and transmission parts, steering parts as well as suspension and chassis parts have not gained any advantage this these moves. So it sought elimination of customs duty on certain grades of alloy steel as well as withdrawal of DEPB benefits on all these steel products.

Warning that Indian auto component industry is facing major threat by way of increase in imports, ACMA pointed out that the increase in input costs is making it further uncompetitive vis-à-vis imports, especially from China.

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