India’s free trade agreement (FTA) with the European Union (EU) has for months Safeguarding local makers
Heavy Industries and Public Enterprises minister Praful Patel told reporters on the sidelines of the Mahindra Navistar Award function that any FTA has to be in reciprocity and will ensure that India’s domestic auto industry is not disadvantaged. The minister also stressed that although it is not advisable to have protectionism in effect in the present day, it will do good ensure that the interest of the domestic automobile industry is not compromised with.
ET Jaichan, proprietor of Bengaluru-based Jaico Tools, manufacturer of engineering cutting tools echoes similar sentiments. He said, “While embarking on FTAs, it is the absolute responsibility of the government to ensure that no harm befalls the local manufacturing sector. FTAs are meant to benefit the local manufacturing bodies and not bring them to a standstill.”
India has protected the automobile sector in most free trade pacts it has implemented. However, the Indian automobile industry has apprehensions that with the FTA with EU, import duties on passenger cars may be slashed. This might not go down well with local manufacturers, as it will make them lose out on competitiveness - both in terms of cost and quality.
Mr Patel also said that India's automobile industry needs clarity on diesel pricing. The Ministry does not support additional taxes on diesel passenger vehicles as it consumes only about 2% of the total diesel consumption in the country, he added.
The minister signed off saying that the automobile sector slowdown is a matter of concern but it is unlikely to continue for long.
Priyanka Roy Chowdhury |
now, causing a lot of stress to the domestic automobile manufacturing industry. Therefore, it comes as a huge relief for them to know that the government is now taking initiatives to safeguard its interests. The government recently said that it will protect the interests of the local automobile industry while negotiating the FTA with EU and will not put the sector in a ‘disadvantaged’ position. 
