Auto firms overcome Covid, China hurdles

India’s leading automakers and their parts suppliers have managed to nearly overcome the supply chain disruptions caused by the pandemic and deteriorating bilateral ties between New Delhi and Beijing, three industry executives said.

Parts supplies have recovered to almost 85-90% of pre-Covid levels while imports from China and other countries have also returned to near-normal levels, barring a few items, the executives said. India imposed stiff curbs on Chinese imports after a border clash in June between Indian and Chinese troops led to the death of 20 Indian soldiers. This severely hit automakers as spare parts imports were already under pressure since January due to Covid, which originated in Wuhan, China.

Automakers’ move to shift sourcing of certain parts from China and increased local manufacturing have helped partly alleviate bottlenecks in supply-chain networks, the executives said. After the sudden halt in June and July, automakers raised output to record levels in October, indicating a smoother functioning of the vendor network and a revival of the just-in-time production model.

Vinnie Mehta, director-general of Automotive Component Manufacturers Association, said the functioning of the industry’s supply chain network saw a marked improvement in the last few months as both domestic production and import of parts, including those from China, are getting streamlined.

“Though the recently-introduced CAROTAR (rules of origin under trade agreements) and faceless clearance by customs have made imports cumbersome; however, the industry is trying to adapt to the situation. Production of vehicles, barring commercial vehicles, and components have reached pre-Covid levels. The industry continues to urge the government to ensure there are no further disruptions for it to effectively continue production,” he said

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