SIAM Opposing Cutting Duties on Imported Cars Under FTA

Society of Indian Automobile Manufacturers (SIAM) has opposed the proposal made by free trade negotiations between India and EU about the custom duties on fully imported cars and engines to be lowered. The SIAM said that this step will severely damage the sector. SIAM has released a 'White Paper' on the proposed India-EU FTA and its possible effects on the automobile sector if it is applied. SIAM added “it has to be avoided at all cost”. 

According to the White paper, “Opening the CBUs to imports/lowering import duties under the EU FTA is a retrograde step and will have a severely damaging and long term irreversible effect in several ways for the Indian economy, auto industry and consumer at large”. The complete list of cost lines, including CBU (completely built unit) and engines, should be preserved in the country's Negative list in all FTAs, paper added.

SIAM further said that,” the Government of India has consistently maintained this policy in all FTAs, including FTAs with Japan, ASEAN, South Korea etc. These items have also been identified in the Automotive Mission Plan 2006-2016. We would like to reiterate that these tariff lines should be kept in India's Negative List under India-EU FTA”

According to SIAM, if this happens (lowering tariff on CBUs and Engines), the investment of foreign manufacturers in India will be reduced. As per the current tariff lines, the global auto-giants are forced to make investments, which ultimately transfers into local manufacturing, local value addition and increase of employment as local employs.

This step will jeopardize the entire Automotive Mission Plan 2006-2016 targets since a;ready some manufacturers have started withholding investment because there is no clarity with respect to tariff reduction in this sector,” SIAM added.

The SIAM also hinted that the EU is a declining market in terms of automotive exports, on the other hand Indian Export market is growing fast. Therefore, this decision will profit only EU and not India. The industry body is genuinely bothered about the India-EU FTA negotiations on tariff plans are going on. EU had said that India-EU FTA cannot be achieved without the inclusion of auto CBUs in the FTA.

It is also expected that India might put their arms in-front of EU as it is still considering and talking with EU on tariff plans despite such future results.

Source : ET

Read More on : Audi R8 expert review