In a big development for auto-ancillary segment, the Modi Government has indicated its willingness to further promote auto ancillary companies. While the sectors is likely to gain from this, there are two companies that the investors should watch out for, Zee Business Executive Editor Swati Khandelwal said. 

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In chat with Managing Editor Anil Singhvi, Khandelwal said that Rane Brake Linings and Sundaram Brake Linings are the two companies which could benefit from this move. 

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The government has decided to impose a non-tariff barrier on the break lining and drum-break lining imports, she said. This means that the imports on these two products will be disincentivised by the government. 

She said that the both Rana Break and Sundaram are two of the biggest manufactures of these two products in the country. 

The government is likely to issue an orders soon with regards to this, she said. The name of this order will be ‘Replacement Break Lining Order Assemblies and drum break lining quality control order 2020’. 

She however said that the quality standards should be as per the Indian Standards Bureau i.e. the Bureau of Indian Standards. If the quality standards are not met by the companies, then there could be penalties, she further said. 

Any goods that are coming into the country will have to be as per the Indian standards. 

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Shares of Sundaram Brake Linings were trading at Rs 244.90 on NSE, up by over 6.7 per cent around 10:40 am.