5 reasons why Maruti, Tata, Honda and Hyundai are very happy with India's Commerce Minister

The Auto Component Manufacturers Association (ACMA), the apex body representing India's auto component manufacturing industry, welcomed the thrust given to promote exports in the new Foreign Trade Policy 2015-20.

The industry body expressed satisfaction on the focus given to consolidation of various exports schemes and further simplification of procedures to help integrate India in the global value chain, improving ease of doing business index through online and e-governance interventions and reducing the transaction cost in international trade, according to an Economic Times report.

172 tariff-lines of auto components are benefited under the new policy compared to the earlier 166. The incentives provided encourage local sourcing and manufacturing as they are based on the amount of value-addition.

5 provisions that get the auto sector's thumbs-up

1. Stable policy for five years with mid-term review.

2. Export incentives consolidated into two schemes - Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS). Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable which can be used to pay customs duty, excise duty and service tax.

3.is Under the export promotion capital goods scheme (EPCG), export obligation reduced from 90 per cent to 75 per cent in case of capital goods sourced locally, this will promote domestic capital goods manufacturing industry.

4. Indian Manufacturers who are status holders will be allowed to self-certify to qualify for preferential treatment under the various Preferential Trade Agreement (PTA), Free Trade Agreement (FTA), Comprehensive Economic Cooperation Agreement (CECAs), Comprehensive Economic Partnership Agreement (CEPAs). The 'Approved Exporter System' will help exporters in getting fast access to international markets.

5. Basic Customs Duty paid in cash or through debit under Duty Credit Scrips can be taken back as Duty Drawback.