invest rajasthan_ auto and auto components
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Sector Highlights
Rajasthan is host to
over 100 existing &
proposed automotive& auto parts
manufacturing
companies
Investment of INR 11
billion by HSCI till
date & may go up to
INR 20 billion
Excellent accessibility
with western &
northern automotive
markets
Expected investment
of INR 21.5 billion in
dedicated Japanese
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Home > Sectors > Auto & Auto C omponents
Auto & Auto Components
Overview
Rajasthan's origin as an auto manufacturing hub dates back to1982 when
Ashok Leyland's truck c hassis assembly plant was set up in Alwar.
Today, Rajasthan is rapidly developing into a key automotive hub with
Bhiwadi, Neemrana and Pathredi in Alwar district being host to over 100
automotive and auto parts manufacturing companies (existing and proposed).
Key players such as Honda Siel Cars, Ashok Leyland, Eicher, Caparo, Federal
Mogul, Continental Engines, Gapai, RPSC, Nissin, Bestex, Havells, Shriram
Pistons & Rings, etc. have already set up their manufacturing base in the
State.
Honda Motorcycle & Scooter India (HMSI) is Honda Motor's wholly owned
two-wheeler manufacturing subsidiary in India. HMSI's second plant in India in
located in at the Tapukara Industrial Area and has become operational from
July 2011 with annual production capacity of 0.6 million units. HMSI aims to
double the annual production capacity of this plant to 1.2 million units in
Agro Processing / Animal
Husbandry
Auto & Auto Components
Education
IT/ITeS
Medical & Health
Mineral based
Solar Energy
Tourism
Other Sectors
PPP Projects
Opportunities
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Zone in Neemrana
Special Auto &
Engineering Zone in
Bhiwadi
303 acre of land
allotted to 22
Japanese companies
March 2012.
Nippon Pipe India Private Limited, part the Japan-based Nippon group, is
sett ing up an INR 1.9 billion steel tube components project for the automobile
industry in the Japanese zone at Majrakath, Neemrana.
Auto Clusters:
Promising auto cluster of Bhiwadi
Bhiwadi region spread over approx. 5300 acres comprises of 3 industrial
areas - Bhiwadi, Chopanki and Khushkera.
Bhiwadi has emerged as a promising automotive cluster in Rajasthan, with
the setting up of Honda Siel Cars India Ltd. factory and the manufacturing
facility of Honda Motorcycle and Scooter India (HMSI).
In close proximity to the manufacturing cluster of NCR allowing easy access
to key auto manufacturers/OEMs/component manufacturers and existing
large talent pool base.
Located just 55 km away from the Indira Gandhi International Airport, New
Delhi; 200 km from State Capital Jaipur; 90 km from Alwar; 40 km from
Gurgaon and only 5 km from NH-8 (Delhi-Jaipur highway).
In Bhiwadi, a special Auto & Engineering Zone has also been developed in
the Pathredi Industrial Area and another spec ial zone is being planned.
To address availability of trained manpower, particularly for Shop-floor
Operations, a Tool Room & Training Centre is being planned over 10 acres.
BMA (Bhiwadi Manufacturing Association) is the representative body of all
the Industrial Units locat ed in Bhiwadi, Chopanki, Khushkhera, etc.
Neemrana: a dedicated Japanese Park in India
RIICO has signed a MoU with JETRO (Japan External Trade Organization)
whereby several Japanese c ompanies shall set up their industrial units at
Neemrana Industrial Area, in Alwar district.
The region is equidistant from Delhi and Jaipur and will also be a part of the
proposed Delhi Mumbai Industrial Corridor (DMIC), making it a strategic
location for these companies.
RIICO has so far allotted 303 acres of land to 22 Japanese companies in
this area.
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Several multinational companies such as Nissin, Mitsui, Nippon, Disking,Mitsubishi & Dykie colour have got land allotted in this industrial area for
establishing their units and some are already operational.
An investment of around INR 21.5 billion is expected on the already allotted
land creating employment opportunities for over 3000 people.
Why Locate in Rajasthan
Market Attractiveness - Easy access to one of the key auto cluster
Strategic location of Rajasthan in India allows accessibility to both western
and northern automotive markets, which together account for over 57 per
cent of total automobile sales in the country.
India's 60 per cent of passenger car production, 55 per cent of motor cycle
production and 25 per cent of tractor production is concentrated in the
National Capital Region (NCR) which is located within a radius of 200 km from
District Alwar, the automotive capital region of Rajasthan.
Close proximity to the NCR region also allows for easy access to the existing
auto component supplier network and logistics facilities there.
Land and Infrastructure- Easy power & land availability at low cost
Rajasthan's c ompetitive advantage lies in its power availability, relatively low
energy & land cost and availability of large contiguous land parcels which is
generally a prerequisite for any automotive OEM (Original Equipment
Manufacturer) to set up base.
A readily available Land Bank system is in place. Also, cont inuous new
acquisition of land is underway for development of industry c lusters by RIICO.
Human Resources - Skilled manpower at relatively low cost
The State has a comparative advantage on labour cost compared to its peer
states (~20-30% lower). Proximity to NCR helps in access to industrial labour
and managerial talent.
There are approximately 1,300 technical institutions in the State with intake
capacity of 210,000. Total intake capacity of engineering, polytechnics and
ITIs in Alwar district is 2930.
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The table below provides human resource availability in Alwar district:
Type of Institute Annual Intake
Engineering Colleges 1620
Polytechnic Colleges 290
ITIs 1020
Industry strength - Strong industrial base
The auto industry in Rajasthan is present across the entire industry value
chain. The auto ancillary segment in the State has seen more investments as
compared to other major states.
Rajasthan has become a prominent base for auto manufacturing with the
establishment of a growing auto cluster in Alwar district and Honda's facility
at Bhiwadi.
Policies
Rajasthan Investment Promotion Scheme (RIPS) 2010:
For setting up of new enterprise, enterprises going for expansion,
modernization and diversification, and projects set-up for common social
good, RIPS 2010 was announced. All kinds of investments a re eligible under this
scheme. The new scheme also simplifies the procedure for grant and
disbursement of s ubsidy, and introduces transparency in system, by introducing
the system of online disbursement of subsidy.
Subsidies
Investment subsidy and Employment generation subsidy have been
introduced.
The maximum amount of subsidy shall be 50% of the tax deposited, i.e.
VAT and CST or SGST (whenever introduced).
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RIPS 2010 provides investment subsidy to all eligible investors of an amount
equal to 30% of the tax deposited, without any linkage with payment of
interest and wages.
Employment generation subsidy has been announced @ 10,000 per
employee/annum. For women, SC/ST and persons with disability this
amount has been enhanced to 12,000 per employee/annum.
For entrepreneurs belonging to Women, SC/ST, or person with disability
category, an additional investment subsidy amounting to 10% of the taxes
deposited has been kept.
These subsidies have been announced for 7 years, but to give boost to the
MSMEs in the not ified area, time limit has been extended to 10 years.
Procedure for subsidy disbursement has been simplified by introducing a
Challan for Adjustment through Treasury.
Exemption from Taxes
The RIPS 2010 scheme announces exemption from payment of various taxes
under the following categories of investment:
1. New Enterprise and Project for Common Social Good
2. Investment made for Modernizat ion/Expansion/Diversification
3. Sick Industrial Enterprise for its revival
The type, extent and period of exemption are as follows:
In case of Enterprises going for modernization/expansion/diversification, t he
exemption from payment of tax(es) shall be allowed only to the extent to
which additional tax liabilities accrue due to utilization of additional capacity
created after modernization/expansion/diversification.
Key Players
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Recent Developments
Honda Motor's wholly owned two-wheeler manufacturing subsidiary in India,
Honda Motorcycle & Scooter India (HMSI), is building its second motorcycle
production plant in the country in Rajasthan with an annual production
capacity of six lakh units. Honda Motorcycles & Scooters has plans to make
investment of INR 5 billion in its facility at Tapukara, Alwar and which could
go up to INR 11 billion
Honda Siel Car India had an initial investment plan of INR 10 billion. Total
investment till date is INR 11 billion and may go up to INR 20 billion
Nippon Pipe India Private Limited, part of the Japan-based Nippon group, is
setting up an INR 1.9 billion steel tube components project for the
automobile industry in the Japanese zone at Majrakath, Neemrana.
"India is the sec ond largest motorcyc le market in
the world. Rajasthan emerged as the most suitable
state for locating Honda's second manufacturing
facility based on the proximity to north and westmarkets and t he existing plants."
V. Sridhar
Vice President (Manufacturing)
Honda Motorcycle & Scooter India
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"We, as Honda, would like to strongly recommend
Rajasthan to all potential investors... the State
which is eager & willing to provide all help to attract
investments and get noticed as an industrialized
State.
Mr. N. K. Goila
Ex-Vice President and Ex-Director, Honda Siel Cars
India
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