Auto Component Industry Seeks LPG/PNG Supply

New Delhi, Mar 10 (PTI) The auto component industry has sought uninterrupted supply of LPG/PNG for MSME foundry and forging units or a reasonable window to shift to alternate fuels amid the government's move to revise the priority order for allocating domestically produced natural gas due to the West Asia crisis.

In a letter to the Ministry of Heavy Industries, auto components industry body ACMA President Vikrampati Singhania said the auto component industry remains deeply integrated with global automotive value chains, and timely support during the present period of geopolitical disruption will help ensure continuity of exports and preserve India's competitiveness in international markets.

Small and medium foundry and forging units may kindly be provided an adequate

transition window to explore and secure alternative fuel arrangements, he said.

In this regard, ensuring at least one month of continued LPG supply would allow these units to undertake necessary technical and operational adjustments in an orderly manner, Singhania stated.

Any disruption or uncertainty in the availability of LPG/PNG could impact production schedules of critical automotive components, particularly for MSME units, which have limited flexibility to transition to alternative energy sources in the short term, he stated.

ACMA also sought expansion of interest subvention support for export credit, including broader coverage of auto components under CTH 8708, to ensure MSME exporters receive adequate financial support.


It also sought an additional working capital support to offset longer export lead times and higher inventory holding costs.

Considering the emerging constraints in availability of chemicals, synthetic rubber,

aluminium scrap, and petrochemical-based inputs like polypropylene from key sourcing regions, appropriate facilitation may also be considered to ensure continued availability of critical inputs required by the auto component industry, Singhania stated.

He also sought restoration and enhancement of RoDTEP benefits, particularly in light of the recent reduction in rates, to help exporters offset rising logistics and compliance costs.

"Rationalisation of duty drawback rates, which currently remain modest compared to earlier incentive levels," he added.

In light of the ongoing geopolitical tensions in the Middle East and the continued disruptions to shipping routes through the Red Sea corridor, several member companies have reported significant operational and cost pressures affecting exports as well as imports of critical inputs linked to export production, Singhania said.

Export logistics costs have risen by 20-40 per cent, primarily due to vessel rerouting around the Cape of Good Hope, higher freight rates, container shortages and increased insurance premiums, he said.

Export lead times have increased by two to four weeks or more, leading to delayed deliveries, order postponements and inventory build-up at warehouses and ports, it added.