Date:08/04/2006 URL: http://www.thehindubusinessline.com/2006/04/08/stories/2006040803760500.htm

Back Govt allows new vehicles import for R&D

Our Bureau

New Delhi , April 7

The Government today announced a provision in the annual supplement of the Foreign Trade Policy allowing import of new vehicles by auto component manufacturers for research and development purposes without homologation.

Homologation is the process of certifying that a particular car is roadworthy and the Pune-based Automotive Research Association of India (ARAI) provides this clearance.

According to existing norms, every original car model brought into the country by an individual or a manufacturer must have homologation clearance. Even domestic car manufacturers need a homologation certificate for new models.

"India is fast emerging as an important centre for sourcing auto components and the Government has already extended a number of facilities to the sector," the Commerce and Industry Minister, Mr Kamal Nath, said while releasing the annual supplement to Foreign Trade Policy.

However, he said, as the facility is for promoting R&D in the sector, the imported vehicle can not be registered under the Motor Vehicle Rules in the country.

"The vehicles will not be allowed to ply on India roads," he added. Reacting to the move, Mr Surinder Kapur, Chairman, Sona Koyo, said: "The move is positive. But I hope it comes with zero duty since duty on imported vehicles is very high."