Zee News, India

Commerce Min for protection of domestic auto industry: Patel

4 September 2011

PTI, New Delhi: Heavy Industry Minister Praful Patel has said the Commerce Ministry is "broadly supportive" of the view that the domestic automobile industry should be protected when India signs a free trade agreement with the European Union.

The industry does not want duties on the import of automobiles, including components, from the EU to be eliminated or reduced under the agreement to encourage domestic manufacturing.

On the other hand, the European Union is pressing for slashing the import duty imposed by India on Completely Built Units (CBU) and Completely Knocked Down (CKD) units.

Patel recently convened a meeting of the Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) to discuss the issue. Commerce Secretary Rahul Khullar was also present at the meeting.

In addition, the Heavy Industry Minister met Commerce and Industry Minister Anand Sharma and briefed him about the issues raised by the automobile industry.

"We support the views of SIAM and ACMA. They (Commerce Ministry) are broadly supportive of our views," Patel told reporters.

The industry feels that if India concedes to the EU’s demand, it would result in a non-level playing field between global companies from Japan and Korea and those from Europe.

The move would also be a deviation from the commitment made by the government while formulating the Automotive Mission Plan (AMP), 2016, and the sector could even miss some of the set targets.

Automobiles are in the negative list of India’s FTA with Japan and Korea, which means that existing customs duties are applicable on vehicles imported from these countries.

India has been negotiating a Broad-Based Trade and investment Agreement (BTIA), the official name for the FTA, with the 27-nation EU bloc, since June, 2007. The FTAs with Japan and South Korea have already come into effect.

The pact with the EU, which is India’s biggest trading partner, would liberalise commerce in goods, services and investment. So far, 13 rounds of negotiations have been held.