Indian auto market is in for some celebration, not already though. India is drawing a proposal where they are likely to agree to a 10% duty on 2.5 Lakh cars imported from Europe for next 5 years. This is being done as a part of a free-trade agreement which is being negotiated currently between the India and EU. As a result of this we might actually be seeing increase in number of Porsche and even more BMW on our roads, with their prices falling down considerably. Currently the import rate is 60%.
The imports are expected to spread across 5 years with first year seeing 40,000 cars and this number will rise every year by 5,000 units thereafter. Along with this, there are speculations that over all the import tariffs might come down to 30% for cars falling outside the quota, once the proposal is implemented.
However, just the way a coin has two sides; this situation might not be as favorable. The Indian car industry has criticized this and SIAM (Society of Indian Automobile Manufacturers) have also warned that this might actually affect the investment of foreign car makers who would prefer to export their cars to the Indian market, in place of setting up their manufacturing units in India.
Under this proposal which is formally being termed as the bilateral trade and investment agreement, along with greater market access for automobiles, EU also has their eyes on wines and whiskies for the Free Trade Areas (FTA). As a return India is looking at relaxations of EU norms which require manufacturers to keep elaborate database on chemicals used in their products and also more visas for professionals, recognition as a data secure country for carrying out off-shore operations along with quality certificate for its herbal products and lower duties on labour intensive products such as leather and textiles.
Source: Economic Times