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Automobile and Auto Components Policy 2015-2020

Key Highlights

  • Isuzu Motors’ pick-up truck manufacturing facility operational
  • Presence of Amara Raja group, India’s second largest Automotive battery brand
  • Upcoming tyre manufacturing facility by Apollo Tyres
  • Presence of more than 100 automotive and auto-component manufacturers
  • Planned auto clusters in Nellore and Chittoor districts
  • Multiple world-class Automotive Suppliers’ Manufacturing Centres (ASMCs) to be set up

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