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Auto parts sector up against `dumping` from China

Business Standard, India

Auto parts sector up against `dumping` from China

By Monica Gupta / New Delhi

4 October 2006

Duty concessions offered to some auto components from China under the Bangkok Agreement from September 1 this year have led to Indian companies alleging dumping.

Auto-component makers want the government to withdraw the tariff concessions immediately. The industry also wants inclusion of more auto component items in the negative list under the India-Thailand Free Trade Agreement.

In a detailed presentation on the impact of the free trade agreements made to Commerce Minister Kamal Nath last week, the industry pointed out that China joining the Bangkok Agreement had come as a shock since the industry was not consulted before tariff concessions were offered on 11 items, including air hoses, rubber mats for vehicles, toughened safety glass, laminated safety glass, spark plugs and catalytic converters.

"Though the duty concession is just 5 per cent, the government should have consulted the industry before offering the concessions to China," an industry source said.

"The industry is facing a serious threat from Chinese firms exporting products at very unreal prices - almost 30 to 40 per cent lower than the Indian prices," the Auto Component Manufacturers Association said.

The industry has also expressed concern over increased imports from Thailand under the India-Thailand Free Trade Agreement.

ACMA has asked the government to eliminate customs duty on all raw material used to manufacture auto components in the list of 82 items covered under the “early harvest” in the India-Thai FTA.

This is important in order to correct the inverted duty structure in the FTA in which the components are at zero duty and raw materials attract a duty of 5 to 12.5 per cent, the industry said.