About half of automobile components exported from India to the United States now face a duty of 50%, posing a major challenge to the component industry, Hisashi Takeuchi, the managing director and CEO of India’s biggest carmaker, Maruti Suzuki India Ltd, said.

“I am aware that almost 30% of auto component exports are to US, about half of it is now facing a duty of 25% and the other half facing 50%. And that poses a major challenge to the component industry,” Takeuchi said at the 65th annual session of the Automotive Component Manufacturers Association (ACMA).

The good part is that the government is very sensitive to this issue and hopefully some solution will be found out, he said, adding that some positive statements from both countries have also come out.

“For some, these disruptions were only setbacks. However, for India, this is an opportunity to rewrite the future. When we look back at history, every few decades a new nation rises as an economic powerhouse,” said Takeuchi.

In the early 20th century, the United States experienced massive industrialisation, said Takeuchi. “The post-war years belonged to Europe, as it rebuilt and industrialised. The late 20th century belonged to Japan and the Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan), as they showed the world the power of technology and precision. The last three decades have belonged to China, as it became the factory of the world.”

And now, the next many decades, belong to India, believes Takeuchi. “It has the world’s largest working-age population. This is the demographic energy that will power our industries for decades. A rapidly growing $4 trillion economy, India is racing to become a developed nation in the next 2 decades,” he said.

Citing Japan as an example, Takeuchi said after the 2nd World War, Japan had almost no resources, yet, with a strong resolve, Japan built global leadership in various sectors including automobiles.

“Japanese companies channelised human emotions towards progress. Employees were treated as partners. On the shop floor, no work was considered small or big. Respect was earned by doing one’s job with passion. Instead of celebrating individual heroism, Japan created harmony by celebrating collective effort,” he said, adding that Japanese companies invested continuously in R&D. “And more importantly, they invested time in deeply understanding customer needs before developing products.”

“As a result, when the products entered the market, they naturally attracted strong customer demand. This is very different from the model where a company rushes to create a product and then spends heavily on marketing to push it,” he said.

On the tax cuts, Takeuchi said the recent actions like reduction in both direct and indirect taxes, and accelerated interest rate cuts will stimulate domestic demand and eventually boost the manufacturing sector.