Japanese Carmakers Demand for Lower Import Duties

Recently, we reported that India is likely to provide concession to European auto-brands as the proposed Indo-EU FTA (free trade agreement). Now, the Japanese carmakers also want India to offer concessions to them as well under the Indo-Japan FTA. Auto-majors such as Toyota, Honda and Maruti Suzuki, which conquers more than 50 per cent of the Indian auto market, are disturbed by the government's proposal to cut down duties on luxury cars under the Indo-EU FTA. They also demanding the same duties on Japanese luxury cars.

Speaking to the media, Hiroshi Nakagawa, managing director of Toyota India, said,"We should get a level playing field. A similar clause should be included in the Indo-Japan FTA to accord equal opportunity to all companies,". He further added that the Japanese companies will be at a disadvantage if India offers selective concessions to European companies.

Honda Car India also responds on the same, Jnaneshwar Sen, the senior VP marketing and Sales at Honda said that "there must be fair market conditions and level playing field". He further said that if the government decides to cut down duty on imported cars from Europe, then the same should also be applicable to Japanese carmakers.

The Indian government has proposed European companies to lower import duties on luxury cars, as per the discussion on a free trade agreement. If this proposal approved, then it will help European automakers to sell some of their marquee brands at competitive prices. Mercedes-Benz luxury sports car will get cheaper by around Rs. 1 crore. SIAM (Society of Indian Automobile Industry) have also opposed the Indo-EU free trade agreement, and said that this will severely damage the auto-sector in India. This proposal will have long term irreversible effect in several ways for the Indian economy, auto industry and consumer at large.

The import duty on completely built units (CBUS) accounts to 75%, but this grows to around 120% after the addition of annual duty, VAT and other levies. The recent union budget proposed an increase of 100 per cent duties on imported cars, which would further increases the prices.

Source : ET