India has been considered as a dump-land for China and other countries, for out growing this thought and name, India planned new quality rules and regulations which need to be followed in order to export to India. The auto-industry is considered as the victim here. As soon as the government put down these regulations, it led to delays and exemptions caused by foreign automakers. This knowledge was sourced by Reuters.

Prime Minister Narendra Modi has initiated and supported the “Make in India” slogan, which means Modi wants to reduce imports and boost local manufacturing to make India more self-sufficient and enable it to play a bigger role in the global supply chains. The foreign auto parts compared with the ones India was importing from China has a huge difference. The Chinese imports were too low quality.

The new rule and regulations have made the quality checks of various auto parts stricter. Introduction to tightened regulations for wheel rims could be introduced by October, according to a Government notice. The Commerce Minister, Piyush Goyal said that, “There is a short-term pain but there is long term gain.”

These regulations will be affecting the automakers of foreign premium brands suffer the most, as they have the highest ratio of imported parts. One of the executives said that, “It’s just an additional compliance burden and will not lead to higher local production because the volumes for luxury are too small to achieve economies of scale.”

Martin Schwenk, head of Mercedes-Benz India, said in a statement to Reuters that additional requirements “will make low volume business unviable”. His company is requesting a “reasonable time line for mid to long term implementation, and exemptions for low volume manufacturers in the short-term.”

According to a source, Society of Indian Automobile Manufacturers (SIAM) is seeking a year to comply with the rules of higher volume vehicles where parts can be locally sourced.

These new rules and regulations have been brought up amid a pandemic even though the sales and demand have already decreased drastically. A senior executive said that, “This is against every tenet of ease of doing business.” These strict regulations will create a disinterest among investors thus, would discourage further investment in India.