9 out of 10 auto firms have paid fines in the last 12 months due to complex regulatory requirements, says survey

31 Oct 2022 , 02:22 PM

According to a poll, nine out of ten automotive firms have paid fines in the last 12 months after failing to comply with one of the more than 900 regulatory compliances that were specified for them. The majority of these companies have pushed for the simplicity of compliance.

According to TeamLease Regtech, the compliance outsourcing company that carried out the survey, the reasons for these lapses include the absence of an extensive and current list of compliances, missing deadlines, and swift regulatory changes. A total of 34 businesses participated in the poll.

The issue's core, however, is the substantial amount of compliance that automakers and industrial firms, in general, must manage.

The chief executive of TeamLease Regtech, Rishi Agarwal, told ET that "the number of applicable acts and compliances is too great." Many of them, particularly those that deal with labour, overlap and are unnecessary.

According to the research, an automotive manufacturing business must deal with 489 federal, state, and municipal compliances. These fall under the categories of corporate, commercial, financial, taxation, and EHS (environment, health, and safety) law. Additionally, automakers must comply with regulations that are specific to their business.

The research claims that taken as a whole, "a modest vehicle manufacturing company operating in a single state in India deals with at least 900 one-time and ongoing compliances in a year."

For around half of these violations, there is a potential jail sentence.

The laws are always changing, which makes matters worse and causes more complexity for businesses. On any of the 2,233 websites of the federal, state, and local governments, more than 3,500 regulatory updates are issued every year via notifications, gazettes, news releases, or other methods.

Over 600 regulatory modifications that affected micro, small, and medium enterprises in the automotive industry, according to a recent analysis by TeamLease Regtech.

Given their size, the majority of Indian organisations find it difficult to keep track of compliances, according to the survey.

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