India’s automobile trade is set for major expansion in South Asia with the Society of Indian Automobile Manufacturers (SIAM) along with the Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA), the Ceylon Motor Traders’ Association, Sri Lanka (CMTA) and the NADA Automobiles Association of Nepal (NADA), forming a South Asian Automobile Forum.
This forum, coming on the sidelines of the Bharat Global Mobility Expo earlier this month, will promote further collaboration and strengthen cooperation among the automobile sector in India and the South Asian countries of Bangladesh, Nepal and Sri Lanka as well as the region. The automobile sector plays a significant role in the economic development of South Asian countries and SIAM President Vinod Aggarwal who is also Managing Director & CEO of VE Commercial Vehicles (VECV), sees great potential for synergies and mutual growth with closer collaboration in this sector.
According to Rakesh Sharma, Chairman of SIAM Exports Group and Executive Director, Bajaj Auto, the forum will also provide a valuable opportunity for members of each of the associations to address shared challenges and explore opportunities for collective growth, while promoting adoption of best practices and responsible advancement of the automobile sector in the region.
The setting up of the forum, comes at a time when automobile exports from India are battling a fall in exports, to the tune of 21 per cent in the last year due to monetary and geopolitical crises in many overseas markets, according to SIAM data. Total exports were 42,85,809 units last year, down from 52,04,966 units in 2022. Passenger vehicle shipments saw a 5 per cent increase to 6,77,956 units. At the same time the Indian automobile sector is projected to become an export-led USD 1 trillion industry by 2035, according to a report by Arthur D Little. The potential will come from focusing on enhancing global competitiveness. India is presently the fourth-largest automotive market in the world, valued at USD 250 billion. It is set to reach USD 600 billion by 2035.
While India’s exports predominantly serve emerging markets, many original equipment manufacturers (OEMs) find the manufacturing standards below par for its developed market clienteles. Recent safety and emission regulations are, however, narrowing the divide between the local automotive industry and developed economies.