India to Safeguard Auto Industry in Free Trade Agreement with EU, says Union Minister

According to the Union Minister, the Indian government is reportedly in its final stages of their negotiations with the European Union to sign a free trade agreement. Reports quoted, Anand Sharma, the Industry and Commerce Minister, as saying that their negotiators are given go-ahead to make sure that interests of India’s domestic auto industry are paid attention to and protected adequately.

According to reports, the minister was answering a question regarding concerns of the Indian auto industry in respect to the agreement between India and EU in Africa. The Indian auto industry reportedly has apprehensions because of the FTA; import duties on passenger cars could be reduced.


At present, most premium car manufacturers attract an import duty of more than 100% including other levies. The industry fears that if India settles for reduced duty, then global auto manufacturers wouldn’t have any incentive to set up shop in the country. Because of major cuts in the import tariff, global auto manufacturers would easily be able to seize the rapidly growing Indian auto market, without locally manufacturing their vehicles.

Sharma was quoted as saying that he urges the industry to not be deceived into reacting on the basis of incorrect reports and speculations. The EU and India have been negotiating an Investment and Bilateral Trade agreement from 2007, and talks have now reached an advanced stage.

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