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Nitin Gadkari to auto industry: There is no reason for fear

Union Minister for road transport and highways, Nitin Gadkari says there is no restriction in terms of fuel usage with electric vehicles coming into the market.

AutoExpo2018 Updated: Feb 07, 2018 15:51 IST
Amrit Raj
Gadkari said that the size of the auto industry today is Rs 4.5 lakh crore while the auto parts industry is worth around Rs 1.45 lakh crore.
Gadkari said that the size of the auto industry today is Rs 4.5 lakh crore while the auto parts industry is worth around Rs 1.45 lakh crore. (Vijendra Singh Gosain/HT Photo )

New Delhi

The Indian auto industry need not fear the momentum in favour of electric vehicles (EVs), said Nitin Gadkari, Union minister for road transport and highways. Gadkari’s assurance comes in the wake of views by several experts who feel that a sudden shift to EVs may change the shape and size of the industry, and may lead to job losses. In an interview, he set the context for future of policy, technologies and changing mobility in the country.

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Edited excerpts:

What is the outlook for the auto sector?

The size of the auto industry is Rs4.5 lakh crore, while the auto parts industry is around Rs1.45 lakh crore. Now, 125 trucks manufactured by Ashok Leyland have been exported from Chennai port to Bangladesh, while 258,000 cars have been exported from Mumbai port. Tuticorin port has exported 450,000 cars.

With the coming of cars running on alternative fuels such as electricity, ethanol, biodiesel, bio-CNG (compressed natural gas) and the progress in technology, there will be a definite rise in exports.

There will also be policies to scrap older cars and commercial vehicles. That will reduce the cost of raw materials, and make spare parts cheaper, which will increase their exports.

The industry, especially component makers, fear a significant disruption if EVs were to come to India suddenly.

They can make those spare parts which would be used in EVs. Besides, we are not banning petroleum and diesel fuels, so ICE (internal combustion engine) vehicles will still sell. Individuals can choose the fuel their car runs on but they will benefit if they (consumers) slowly change with the technology.

Nitin Gadkari, minister of road transport, highways and shipping. (PTI)

I believe there is no reason for fear because there are no restrictions in terms of fuel.

Initially, there was some talk that by 2030, India would have an all-electric fleet. Is that the official stand of the government?

There has been a fixation on the year 2030. The market should be driven by market dynamics.

If you spend Rs6,000 on your monthly car maintenance, but have to spend only Rs1,000 on an EV, with the maintenance cost falling, you would naturally buy the EV.

(Let’s say) petrol costs Rs80 (per litre), diesel costs Rs60 (per litre) and electricity costs Rs8 (per unit). There are savings, so there’s no need to force EVs on people the world over.

We will also have an electric bus. BEST (Brihanmumbai Electric Supply and Transport) spends Rs110 per km, while a bus running on ethanol in Nagpur spends Rs78 per km. An electric bus will spend even lesser, at Rs50. Ticket rates will also fall by 25-40%. This is a good thing.

When is the policy on EVs expected?

The NITI Aayog has prepared it and we are awaiting cabinet approval.

There are several government departments involved with EVs. It is not clear who the final decision-making authority will be.

As long as the industry is progressing, there’s no issue. In Nagpur, there are 200 electric taxis, 20 charging stations with 20 more being added, with a location being readied to charge 600 EVs at once. An electric bike will also be available soon, with a proposal to deploy them as taxis. The driver and rider will be mandated to wear helmets. If it costs Rs200 to commute in a taxi, Rs100 in an auto, it will take Rs60 in an e-rickshaw and maybe Rs15 on an e-bike.

What is the incremental allocation you have asked for in the budget for the promotion of EVs in public transport?

We have requested for the road sector, bus ports, etc. We have asked for Rs25,000 crore more from the finance ministry, taking the total to Rs80,000 crore. But there are a few constraints.

The market for cars is three million units, with a projection that the number would reach 13 million by 2025 on the back of infrastructure growth and new technology. What is your view on this?

The auto industry in India provides maximum employment and contributes the most to growth. This is the most important industry as far as our industry is concerned and constantly, exports of automobile parts and even cars as a unit, have increased.

Therefore, we want to grow the sector and increase its exports contribution by way of innovation and research in alternative fuels, which are cost-effective, pollution free and indigenous import substitutes. We would like to promote such new technology and exports cars fitted with them; this would increase employment. So the industry and our GDP would benefit as well.

Earlier, the industry was averse to new technology. Have you noticed a change recently?

We said that 1 April 2020 is the deadline for the changeover to BS VI. Everybody was questioning the possibility. But today, a company has met the BS VI emission norms with BS IV fuel, so it is possible with research. There is no reason for fear. The more we innovate, research and design, the more our market and exports will grow. The cost of running a car will reduce, we will save fuel costs, so it will benefit the country.