AUTO & AUTO COMPONENTS

INDIA LANDSCAPE

Key National Strategic Priorities

India aims to double its auto industry size to USD 17.8 bn by end of year 2024.
The auto component industry records highest-ever turnover of USD 69.7 mn, grew at 32.8% in FY 2022-23.
In the year 2023, the contribution of this sector to the National GDP has risen to about 7.1% from 2.77% in 1992-93.
The EV market is expected to grow at CAGR of 49% between 2022-2030.
India is the third largest Automobile Market in the World.
World's third largest heavy truck manufacturer and fourth largest car manufacturer.
The Automobile Sector resulted in 5.34% of the total FDI inflow in India as per DPIIT report of FY 2023.
The Auto and Auto Component sector contributes to 7.1% of India's GDP (FY 2023).
The sector provides direct and indirect employment to over 19 million people.

Rajasthan Landscape

Rajasthan is an attractive destination for the automobile and electric vehicle (EV) sector due to its strategic location, robust infrastructure, and supportive government policies.

In FY 2021, Rajasthan accounted for 9% of the total two-wheeler sales in India.
As per data from the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) program, Rajasthan accounted for 6% of total EV sales in India.
Rajasthan has more than 120 automotive and auto component manufacturing units.

Rajasthan: Value Proposition for Auto & Auto Components Investors

Rajasthan is committed to the development of the auto & auto components sector through infrastructure support as given below:

India's 1st Japanese Industrial Zone in Neemrana.
Other Major Auto clusters near Bhiwadi
- Karoli Industrial Area
- Tapukra Industrial Area
- Pathredi Industrial Area
- Chopankhi Industrial Area
- Bhiwadi Industrial Area
Research and Development centre established by Hero MotoCorp in Jaipur
415+ well developed industrial areas with 10K hectares of industrial land available (No. 4 in India)
Strategic location and excellent connectivity: Rajasthan is well-connected by air, road, and rail. Major cities like Jaipur, Udaipur, and Jodhpur have airports with flights to and from key Indian cities and international destinations.

The State has many national and international level reputed institution contributing to the growth and development of Human Capital in the State.

Universities: There is total 88 universities, out of which 53 are private universities and 28 are State funded universities and 7 other universities.
Nationally and Internationally Renowned Institutions: The State is home to numerous technical institutes, including prestigious ones like the Indian Institute of Technology (IIT) Jodhpur, Indian Institute of Management, Udaipur, Indian Institute of Information Technology (IIT) – Kota, National Institute of Logistics and Material Management, Udaipur, National Law University, Jodhpur, All India Institute of Medical Sciences, Jodhpur, FDDI – Jodhpur, The Birla Institute of Technology & Science, Pilani etc.
Availability of Manpower: Pool of a large young, trained workforce with 62% of Indian population in the working age group of 15 to 59 years.

Rajasthan is actively developing its skilled workforce in the Automobile sector, with a sharp focus on comprehensive skill development initiatives.

Under the Skill India Mission, Honda Motorcycle and Scooter India Pvt. Ltd. (HMSI) has two Skill enhancement centres in collaboration with Government Industrial Training Institute (ITI), Kota.
Jaipur Federation of Automobile Dealer Associations (FADA Academy) has tied up with Bhartiya Skill Development University to roll out a dedicated program to create a talent pool for skilled automobile workers.
Skill development in EV maintenance, battery manufacturing, and skills & livelihood development is planned to be introduced by the Rajasthan Skills & Livelihoods Development Corporation (RSLDC).

Policies & Incentives

Rajasthan Investment Promotion Scheme 2022 (RIPS 2022)

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Asset Creation Incentives (ACI)

Investment Subsidy (SGST Reimbursement) -75% of the State tax due and deposited for a period of 7 years OR
Capital Subsidy -13-28% of EFCI* to be disbursed in annual instalments over 10 years OR
Turnover Linked Incentive -1.20% - 2.0% of Net Sales Turnover to be disbursed annually for 10 years

Special Incentives

Employment Booster -10% - 15% booster on chosen Asset Creation Incentive
Training & Skilling Incentive - Skilling support in form of a Training Subsidy of Rs. 4000 per worker per month for 6 months for training delivered in Rajasthan

Special Incentives

100% Stamp Duty
100% conversion charges
100% exemption of Electricity duty for 7 years

Additional Incentives

Thrust Sector Booster - 10% Thrust Booster on top of ACI chosen OR
5% Interest Subsidy for period of 5 years OR
Anchor Booster - 20 % Anchor booster on top of ACI chosen

Customized Packages

Investment of more than Rs. 500 cr - Option to redistribute benefits among ACI (Capital, TLI and SGST reimbursement)
Investment of more than Rs. 1000 cr and employment of more than 800 persons - Customization on a higher NPV of the Asset Creation Incentive upto 20% of the NPV of the chosen ACI.

Other unique features-

The State will also allow telescoping and upgrade the earlier set of incentives paid on a lower slab basis the total incentives applicable once the full investment is completed.
If a group/cluster of enterprises within the same or nearby premises (within 50 km radius), come in with a consolidated investment proposal, then it shall be eligible for cluster incentives.

Rajasthan Electric Vehicle Policy (REVP) 2022

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Ease of Doing Business

RajNivesh portal provides a single point, online interface and a time-bound clearance mechanism by acting as a one-stop information / registration / approval / tracking centre for clearances & approvals.
The platform integrates 120+ services across 14 departments, emphasizing the State's commitment to the implementation of investor-friendly policies that enhance ease of doing business and promote sustainable development.
Officials from 14 concerned Departments of State government have been deputed to Bureau of Investment Promotion, Rajasthan for facilitation of investment proposals.
Under the Rajasthan Micro, Small and Medium Enterprises (Facilitation of Establishment and Operation) Act-2019:
- For the execution of this Act, the Government of Rajasthan launched a web portal "https://rajudyogmitra.rajasthan.gov.in/" on 12th June 2019 for filing applications.
- Issuance of 'Acknowledgement Certificate' up on submission of 'Declaration of Intent' electronically or physically to the nodal agency.
- On basis of said certificate an MSME unit is exempted from approvals and inspections under all State laws for 5 years from the date of issuance of the Acknowledgement Certificate