Oct 29, Colombo: Atul Auto, a leading manufacturer of three-wheeled commercial vehicles in the Indian state of Gujarat is considering to invest in Sri Lanka to form an auto manufacturing plant.
The Rajkot-based three-wheeler maker plans to set up a manufacturing plant with a small investment of less than 100 crore Indian rupees (US$ 18.5 million), according to a Business Standard report.
Atul Auto's move is aimed at overcoming the recent duty hikes imposed by the Sri Lankan government on imported autos.
Sri Lanka in March this year slapped Petrol and Diesel driven three wheelers with a 100% tax and 50% tax on electric three wheelers.
The plant will be geared to manufacture three-wheelers, powered by diesel engines, for intra-city passengers and cargo applications, Atul Auto has informed the Bombay Stock exchange (BSE).
"The company will also, at an appropriate time, introduce three wheelers powered by spark ignition engines running on gasoline, CNG and LPG," the company has informed BSE today.
It has already made an application to Sri Lanka's Board of Investment of seeking approval for the investment, the report said.
Another leading Indian Company, US$ 15.4 billion Mumbai-based Mahindra Group is also considering to invest in a vehicle assembly plant in Sri Lanka to cope with the growing demand and higher import taxes.