Domestic automobile companies ask government to review previous trade agreements before signing FTA with EU
The government has been approached by domestic automobile makers to not agree to reduce or eliminate tariffs on CBUs or Completely Built Units for finalizing Free Trade Agreements or FTAs with the European Union and the RCEP or Regional Comprehensive Economic Partnership member countries. Say the companies, Cutting tariffs on CBU (or fully assembled automobiles) will hurt job creation, technology transfer to local firms and prevent the Indian auto industry from being internationally competitive.
Free Trade Agreements have been proposed by the RCEP among 16 countries from the Asia Pacific region, including India and China. The Society of Indian Automobile Manufacturers or SIAM has met with officials from the commerce ministry, during which they have demanded that the government publish a review of existing FTAs with the ASEAN or Association of South East Asian Nations, Japan and Korea, before taking forward negotiations with the EU and RECP members. The review, they say, can show if the agreements have hurt domestic manufacturing due to increased imports.
Speaking about this, an official from SIAM said, SIAM - noting that the EU had been demanding India agree to drastically reduce or eliminate duties on CBUs to help restart the FTA negotiations - had pointed out to the commerce ministry that the EU had been for long protecting its interests especially in segments like pick-up trucks with a relatively high duty of 22 per cent. Therefore India also should maintain high duties on CBUs to protect domestic manufacturers.
