Amid reports that India is considering reducing import duty on imports of completely built units of electric vehicles, Minister of Commerce and Industries Piyush Goyal, who has been working overtime to stitch a Free Trade Agreement with the United Kingdom, today said the Indian automobile industry is not scared of any competition.
“The (automotive) industry is very confident and not scared of any competition and India (car makers) can stand up to anybody in the world,” Goyal said today on the sidelines of announcing the Bharat Mobility Global Expo, when asked about the domestic automotive industry’s consensus on the FTA.
Recently, there have been reports that the government has proposed to cut duties for British electric vehicle makers in the FTA with the UK, provided they localise 45 percent of their components. The center has also reportedly told domestic automakers that lower duty for importing electric cars is inevitable in the agreement under the proposed FTA.
The negotiations for the FTA with the UK are in their advanced stage and the government is likely to conclude the discussions ahead of the Lok Sabha elections scheduled for April and May. Some of the automakers including Tata Motors and Mahindra & Mahindra had reportedly reached out to the government to raise their concerns on plans for a lower import tax on electric vehicles.
However, India’s largest passenger vehicle maker Maruti Suzuki is supporting a reduction in higher import tax on cars from the UK and European Union, Business Standard today reported, citing an interview with Chairman RC Bhargava. “My views may not be shared by the industry, but we are as competitive as UK and the EU in cars, and in many models our costs are 20-30 percent lower in India in my estimate. So there is no reason why import tariffs on cars cannot be reduced as sought by the UK government under the India-FTA negotiations. I think a 30% import duty is fine,” he reportedly said.
Currently, India levies a 100 percent import duty on cars with cost, insurance, and freight value over $40,000 while those under $40,000 have a 70% import duty.