Big B, SRK in Sachin's company
What's common between Mukesh Ambani, Amitabh Bachchan, Shah Rukh Khan, Lalit Suri, and Sachin Tendulkar? Besides being high net worth individuals, these industry icons are among the 50-odd individuals who have approached the commerce ministry seeking a waiver of the mandatory "homologation" or road-worthiness test for their prized possession -- an imported beauty on wheels...
...In addition, a host of corporate houses and hotels are also queuing up to seek a similar waiver, and lobbying to push through a regulation that allows them to import cars from any country and run them in India without getting a road-worthy test certificate.
Some of these individuals and companies have even asked the customs department to encash their bank-guarantee in case they default in producing the test certificates of their vehicles. "It's an easy way out for these individuals as these bank guarantees are normally 10 per cent of the car's value," says a government official.
"The pressure groups are working overtime now for the regulation," says the official. No wonder, the centre is planning a new regulation and contemplating allowing not only individuals but also companies (under the EPCG scheme) to import cars without having to undergo the required road tests in India.
But what's yet to be decided, the official adds, is that whether the government would pass this regulation with retrospective effect or with prospective effect. "And, if the centre decides on the retrospective effect, who will fix the date and who will benefit from this?," the official asks.
The move has already irked industry bodies. The Society of Indian Automobile Manufacturers (SIAM) and CII have opposed the move saying it would lead to mushrooming of imported car dealerships, which would be detrimental to the health of car makers who have invested in India.
While DGFT's L Mansingh maintains that a decision on the matter has not yet been taken as it's awaiting a final word from commerce minister Arun Jaitley, government officials pointed out that the ministry is moving towards opening the doors to such imports.
The government is planning to allow individuals and companies to freely import cars over 1800cc or above $50,000 in value. Industry bodies are seeking to raise this limit to 3000cc cars.
Ramesh Adige, president of Automotive Research Association of India (ARAI), which conducts these homologation tests, says: "If the government, in its wisdom, would like to remove this condition, I suggest that homologation certificates issued by foreign testing agencies should be vetted by a committee comprising DGFT, department of heavy industry, ministry of road transport, ARAI and SIAM."
While the decision to ease the existing norms may benefit individual consumers, the question still to be answered is 'Who will guarantee the authenticity of an international certificate?'