Finance Minister P. Chidambaram Thursday said he would review the tax structure for the automobile industry, especially for small cars, as global automakers are increasingly looking at setting up a base in India.

"The government is fully aware that small car manufacturers are looking at India as a base for such manufacturing," Chidambaram told the annual convention of the Society of Indian Automobile Manufacturers (SIAM), the industry lobby.

"We have to revisit the question of taxation earlier than we thought we would do," he said, adding that this was imperative for helping car producers set up viable units in the country.

The current excise duty rate on cars is 25 percent and even smaller models are on the luxury item list along with products like tobacco and alcohol.

The finance minister said companies like General Motors, Toyota Motors and Skoda were showing growing interest in increasing their operations in India.

He was of the opinion that rationalisation of tax structure will give existing small carmakers and new entrants the incentive to boost production and make the country a global hub for production of small cars.

Earlier, the secretary in the ministry of heavy industries and public enterprises, Priyadarshi Thakur, said that the government was setting up a task force to study the current status and challenges in the automotive industry.

The task force would seek to prescribe remedies to various bottlenecks that hinder growth and development of the industry, he said.

The event was well attended and focussed on "Internationalisation and Product Development - The Next Wave. Indian Industry." The daylong conference debated on issues like marketing, brand building, IT, insurance and design engineering.