Under the Free Trade Agreement (FTA) with the European Union (EU), the Indian govt. is looking at relaxing import duties for automobiles
As part of the Free Trade Agreement (FTA) with the European Union (EU), the central government is showing interest for relaxations in import duties on certain products like automobiles, wines and spirits. These products were reluctant to be given flexibility in previous years and it created controversy. However, moves have been underway to resume the Trade and Investment Agreement (BTIA) in recent times.
The Trade and Investment Agreement (BTIA) is a long-time story as it dates back to 2007 and it almost reached a decisive stage six years later before ultimately collapsing over automobiles, wines and spirits. India’s Prime Minister Narendra Modi has raised the problem with Angela Merkel, chancellor of Germany.
Reports suggest that Commerce and Industry Minister Piyush Goyal followed it up and contacted new Trade Commissioner of the European Union, Phil Hogan, as well for further improvement in talks. Goyal has openly talked about the country’s inclination towards engaging with the European Union.
Moreover, India is also interested in convening with the United States for a bilateral trade agreement. This comes on the back of the nation avoiding Regional Comprehensive Economic Partnership (RCEP) agreement consisting of highly influential countries like China, Japan, Korea and other ASEAN countries, Australia as well as New Zealand.
In addition, India is also looking to pursue a trade affair with the United Kingdom in an effort to tap the potential in textile and farming sectors. Back to automobiles, the Indian government appears to be aiming at allowing some vehicles reportedly at lowered import duties via Free Trade Agreement (FTA) with the European Union (EU).
This could potentially result in European brands operating in India becoming less expensive considerably. The whole agenda behind the impact on automobiles is not known and we hope to know more about it in the coming weeks. The government seems to be reluctant in non-trade related issues concerning dilution of intellectual property rights, environmental standards and labour.