Automobile and Auto Components Policy 2015-2020

Key Highlights

  • Presence of over 100 automotive component manufacturers
  • Hub for production of cylinder liners and clutch plates
  • Manufacturing of pickup trucks by Isuzu Motors in Sri City
  • MoU signed with Bharat Forge for Auto Components Park
  • Hero Motors is set to start civil construction
  • Amara Raja to setup a facility in Chittoor district

Automobile &
Auto Components Policy

Key Policy Targets 2020

Key Initiatives

  • Automobile Industry declared to be Public Utility under the Industrial Disputes Act 1947
  • Quality Testing cum R&D laboratories to be set up in collaboration with leading global institutions
  • Land to dependent ancillary units at the same rate as to OEMs subject to conditions

Major Clusters / Parks

  • Multiple world-class Automotive Suppliers Manufacturing Centres (ASMC) on a PPP basis. These centres are industrial parks dedicated to auto component manufacturers
  • 2 major Auto Clusters (apart from the ASMCs mentioned above) in districts of Nellore and Chittoor
  • Auto Components cluster in Vijayawada

Key Fiscal Incentives



CAPITAL SUBSIDY Capital subsidy for Auto Clusters and ASMC developers – 50% of fixed capital investment in building and common infrastructure (maximum of ₹20 crore)
PATENT COST 75% reimbursement, subject to a maximum of ₹25 lakh
QUALITY CERTIFICATION 50% reimbursement, subject to a maximum of ₹5 lakh for MSME units
INTERNATIONAL FAIRS 50% reimbursement of cost of participation in international fairs upto ₹5 lakh
Special Incentives for Mega Integrated Projects:
  • 100% CST reimbursement for 10 years or GST regime, whichever is earlier
  • Gross VAT/SGST reimbursement on sale of finished goods for 20 years, or 150% of capex spent in first 7 years, whichever is earlier
  • Concessional VAT/SGST rates on input & capital goods @ 5%, and reimbursement of state VAT/SGST of input credit for 20 years
  • 75% reimbursement of Gross VAT/SGST for 10 years from the date of commercial production,or 100% of capex spent in first 7 years, whichever is earlier
OTHER TAXES AND DUTIES No entry tax and octroi duties; reimbursement of stamp duty, transfer duty
WATER SUPPLY 50% of the price of existing industrial supply tariff for the initial 5 years

Existing Partners

Upcoming projects