The import tariff protection covered for the automobile and its ancillary units are to be stripped off, indicated the Commerce Secretary. The present structure of import tariff is 106% for Completely Built Units and 60% for Completely Knocked Down units. The import duty on auto components is in the range of 7.5-10%. The government’s move to reduce the import tariff would benefit Japanese and European Union car makers much. India is on the negotiation process with these two countries on Free Trade Agreements.
The secretary hinted that a time has come now for the Indian car makers to raise to the occasion. However, the government does not want to wash away the domestic auto industries under FTA. The next ten years, he added, will be a testing time for securing the good profit and the companies shall focus on it. The government, in the meantime, is fully aware and taking into consideration the rupee depreciation against the auto export sector, cost rise in steel and lack of fund for Technology Upgradation. According to a study revealed by Emst&Young, the export figure of Indian automotive needs to reach %35-42 billion in another six years.