Indian Government to back auto industry's interest in European Union FTA

Tuesday 20 December 2011, 12:46 PM by

In order to save automobile industry from 'disadvantaged' position, Indian government confirmed that it will do its every-bit to save interest of domestic industry while negotiating free trade agreement (FTA) with the European Union. The free trade agreement (FTA) has to be in reciprocity, although Ministry of Heavy Industries and Public Enterprises confirmed its support for protection of Indian auto industry from the situation of loss.

Referring to the issue during Mahindra Navistar Award function, Heavy Industries and Public Enterprises Minister Praful Patel told press that protectionism is not a part of modern age, but interests of the domestic automobile industry cannot be compromised. Praful added, referring to the existing diesel pricing policy, that India's automobile industry needs clarity on diesel pricing.

The automobile industry has no say on the pricing of diesel and moreover industry does not favour dual pricing that may lead to misuse. He confirmed that Ministry does not support additional taxes on diesel passenger vehicles as the levies consume only two per cent of the total diesel consumption in the country.

Meanwhile, the automobile sector is already shielded by Indian government in all the free trade pacts it has implemented, one each with Malaysia, ASEAN nations and South Korea. However, Indian automobile industry fears that the pact with free trade agreement (FTA) with the European Union will slash the import duties on passenger cars, as EU is demanding heavy duty cuts in the India's automobile sector.