The Department of Heavy Industry, under the Ministry of Heavy Industries and Public Enterprises, is the main agency in India for promoting the growth and development of the automotive industry. The department assists the industry in achievement of its expansion plans through policy initiatives, suitable interventions for restructuring of tariffs and trade, promotion of technological collaboration and up-gradation as well as research and development. The department is also concerned with the development of the heavy engineering industry, machine tools industry, heavy electrical industry, industrial machinery, etc.

The automobile sector recorded growth of 13.56% in 2006-07. During the year 2007-08 (April-December), the industry decelerated at 3.49%. The automobile exports crossed the US$ 1 billion mark in 2003-04 and increased to US$ 2.76 billion in 2006-07. The industry exported 15% of its passenger car production in 2006-07, 10% of commercial vehicles production, 26% three wheelers and 7% two wheelers. Similarly, during the year 2006-07, the auto component industry continued its high growth path and emerged as one of the fastest growing sector in Indian engineering industry by clocking 21% growth in output during the year. This industry crossed a total turnover of over US $ 15 billion (Rs. 64,500 crore), with exports of US $ 2.9 billion (Rs. 12,643 crore) during the year. Investment in the industry also grew by over Rs. 4500 crore during the year as the industry continued to invest in capacity enhancements and new greenfield sites to cope with the increasing demand.

The auto component industry’s export growth was 15% in 2006-07. While, the total imports was US $ 3.3 billions (Rs. 14,644 crore). On the quality and productivity front, auto component industry maintained its leadership with more than 95% companies being certified as per the ISO 9000 system standards and more than 70% of the companies are certified as per the ISO/TS 16949 standards. It has also the distinction of having the maximum number of 11 Deming award winning companies.

Another milestone in this field has been the launching of the National Automotive Testing and R &D Infrastructure Project (NATRIP) which aims to create core global competencies in automotive sector and facilitate its integration with the world economy. It seeks to develop 'state-of -the- art' testing, validation and R& D infrastructure in the country with a view to support the growth and development effort of the automotive industry to reach international levels. NATRIP envisages setting up of world-class and homologation facilities in India with a total investment of Rs. 1,718 crore within the three automotive hubs of the country.