India: Industry Expresses Concern Over EU-FTA Duty Cuts.

Even as India's minister for Commerce and Industry, Anand Sharma, assured that the country's auto industry would be adequately protected, speculation has been rife about India giving in to the EU's demand on lowering duty on imported cars in the proposed free trade agreement (FTA).

India's automotive industry has cautioned that in such an eventuality, future investments will be hit, Press Trust of India said. India and the EU have been negotiating an FTA and this is expected to be signed by the end of this year.

About a month ago, Sharma said the country would protect its automotive industry in the negotiations. He said the negotiators had a mandate to ensure that the interest of the industry is taken care of and adequately protected.

According to the Society of Indian Automobile Manufacturers (SIAM), lowering the duty on imported cars would create disparity among global OEMs from Japan and South Korea, with those in Europe. The association further added that such a move would be a deviation from the government's commitments while formulating the Automotive Manufacturing Plan (AMP) 2016.

"SIAM has been maintaining that import duty range on CBUs (completely built-up units) should not come down. A major concern is that if we allow the CBU duty to come down then the level of investments in India may come down," PTI quotes SIAM president Pawan Goenka as saying.

SIAM members and industry analysts reflected the association's views. Honda Siel Cars India senior vice president (Sales and Marketing) Jnaneswar Sen said: "Lowering of duties in India-EU FTA will be contrary to what the government has so far been doing to encourage more investments in India." An analyst, who spoke on condition of anonymity, said: "With future investments likely to be affected, one of the major aims of the AMP 2016 of creating 25 million employment may not be achieved."

Although nothing has yet been finalised, it is understood that the EU wants import duties on luxury cars with minimum engine capacity of up to 1.5 litres to be reduced from 60% at present to 30%.

Source : automotiveworld.com