The release of the 2012-13 Union Budget triggered disappointment among the automakers in the Indian market due to the hike pronounced in excise duties stimulating an overall price rise trend on almost all the cars. The excise duty rates shot up from 22 percent to a 27 percent high along with a stable duty of Rs. 15000 on cars lengthier than 4 metres and engine capacity of more than 1200 cc for petrol run cars and 1500 cc for diesel run cars.
The rise in excise duty has strictly restricted the production of big cars by the Indian automakers but greater dismay came with the announcement of concessions in importing big cars from Europe.
The Indian automotive regulatory body, Society of Indian Automobile Manufacturers (SIAM) is opposing the decision of the government that is considering cut in import duties to meager 10 percent under the India-EU Free Trade Agreement (FTA) for all the big cars set to be imported from European continent.
The Sr. Director of SIAM, Mr. Sugato Sen expressed his concern as, "We are faced with a higher excise duty on cars other than small cars ostensibly because they are for the rich. This has resulted in India not developing strength in bigger cars."
He further added, "Concessions if any, by India on automobile sector will be dependent on the agriculture package negotiations."
However, the further negotiations will be streamlined with the demand put forth that access to the European market for Indian agricultural products should be extended.
