Corporate tax revision to benefit auto industry

Rating agency ICRA is of the opinion that India’s automotive industry is likely to be one of the key beneficiaries of corporate tax revision. The agency of stated that the lessening of corporate tax rates to globally competitive levels will incentivize OEMs (original equipment manufacturers) and their vendors to opt for to localization. This is a great reason to rejoice since it accounts for about half of the country’s manufacturing GDP. 

“Given the increasing US-China trade tensions, revision in corporate tax will attract FDI in Indian manufacturing sector, as the revised tax structure is now in line with other emerging markets,” urged ICRA.

 The industry’s performance has been underwhelming this year due to factors like tighter financing environment for consumers and liquidity crunch faced by dealerships.