India will protect its automobile industry as it has reached the final stages of negotiations for a free trade agreement with European Union.
“They (our negotiators) have a mandate to ensure that the interest of the domestic (automobile) industry is taken care of and adequately protected,” the Commerce and Industry Minister, Mr Anand Sharma, said here.
He was responding to a question about the concerns raised by the Indian automobile industry on the India-EU agreement.
Indian automobile industry has apprehensions that with the FTA, the import duties on passenger cars may be slashed. At present, high-end passenger cars attract an import duty of over 100 per cent (basic plus other levies).
The fear is that if India agrees for aggressive cuts in these duties, there would not be any incentives for global auto majors to set up their manufacturing base in the country.
With drastic cuts in import tariff, they would be able to capture the fast growing Indian market without even manufacturing them in the country.
“I would urge the industry not to be misled into reacting based on speculations and incorrect reports,” Mr Sharma said.
India and EU are negotiating a bilateral trade and Investment agreement since 2007 and the talks have reached advanced stage.