ACMA seeks LPG supply continuity for MSMEs amid gas allocation concerns

India’s auto-component manufacturers have urged the government to avoid abrupt cuts to LPG and PNG supplies for heat-intensive MSME foundry and forging units, warning that sudden disruptions would hit production and exports as geopolitical tensions escalate in West Asia. The plea came in a letter to the Ministry of Heavy Industries from the Automotive Component Manufacturers Association of India.

“The auto component industry remains deeply integrated with global automotive value chains, and timely support during the present period of geopolitical disruption will help ensure continuity of exports and preserve India's competitiveness in international markets," said Vikrampati Singhania, President of ACMA.

Transition window for MSMEs

ACMA asked the ministry to allow smaller foundries and forges a practical transition period to secure alternate fuels and complete necessary engineering work. “Small and medium foundry and forging units may kindly be provided an adequate transition window to explore and secure alternative fuel arrangements," the letter said.

Rising logistics and export pressures

The association also flagged steeply rising export costs and longer transit times after shipping disruptions forced rerouting around the Cape of Good Hope to avoid the Red Sea, adding weeks to voyages and lifting insurance and freight charges.

It stated, “In light of the ongoing geopolitical tensions in the Middle East and the continued disruptions to shipping routes through the Red Sea corridor, several member companies have reported significant operational and cost pressures affecting exports as well as imports of critical inputs linked to export production."

ACMA says export logistics costs have risen by 20–40 per cent and lead times have lengthened by two to four weeks or more. These pressures are delaying deliveries, postponing orders and increasing inventory at ports and warehouses.

Financial and input-supply measures sought

ACMA has also sought expansion of interest subvention support for export credit and broader coverage of auto components under CTH 8708 to ensure MSME exporters receive adequate financial assistance. The association also requested additional working capital support to help exporters manage longer lead times and higher inventory holding costs.

“Considering the emerging constraints in availability of chemicals, synthetic rubber, aluminium scrap, and petrochemical-based inputs like polypropylene from key sourcing regions, appropriate facilitation may also be considered to ensure continued availability of critical inputs required by the auto component industry," Singhania said.

ACMA also urged the restoration and enhancement of benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme following the recent rate reductions.

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