Recently, there were reports that the government is proposing to reduce tariffs on British electric car manufacturers in an FTA with the UK on the condition that they produce 45 percent of their parts domestically.
Commerce and Industry Minister Piyush Goyal, who is working overtime to conclude a free trade agreement with the UK, said today that India is considering lowering import duties on finished electric vehicle imports. He said that the automobile industry is in a difficult situation. I’m not afraid of any competition.
“The (auto) industry is very confident and is not afraid of any competition. India (Automakers) can stand up to anyone in the world.” Automotive industry consensus on FTA.
Recently, there were reports that the government is proposing to reduce tariffs on British electric car manufacturers in an FTA with the UK on the condition that they produce 45 percent of their parts domestically. The Center has also reportedly told domestic automakers that a reduction in electric vehicle import duties is inevitable under the proposed FTA.
FTA negotiations with the UK are at an advanced stage and the government is likely to conclude them ahead of the Sabah state elections scheduled for April and May. Some automakers, including Tata Motors and Mahindra & Mahindra, have reportedly approached the government to express concerns over plans to reduce import duty on electric vehicles.
However, Maruti Suzuki, India’s largest passenger car maker, supports relief from high import duties on cars from the UK and the European Union, Business Standard reported today, citing an interview with chairman RC Bhargava. “My opinion may not be shared by the industry, but we are as competitive as the UK and EU when it comes to cars, and my estimates are that costs in India are 20-30 per cent lower on many models. “Therefore, there is no reason why the import duty on cars cannot be reduced as the UK government is seeking under the India-FTA negotiations. I think 30 per cent import duty is fine,” he was quoted as saying.
Currently, India imposes a 100% import tax on cars with a cost, insurance and transportation cost of more than $40,000, and a 70% import tax on cars costing less than $40,000.