India is on the verge of signing the final deal with European Union countries to encourage Free Trade Agreement (FTA) but on the other hand, severely hit domestic manufacturers have already started raising their voice against the agreement.
Heavy Industries minister, Praful Patel has organized a meeting between the two nodal automotive associations of India, SIAM and ACMA. Praful Patel has offered to extend his full support to the industry.
The senior members at Automotive Component Manufacturer association(ACMA) have raised their voice against the issue and have said that the agreement which is now under negotiation for few years is yet to finalize by June 2012. As per them, the agreement would result into an inverted tariff structure of the industry.
The Government is looking to sign a deal with countries which have lower Tax structure as compared to India, rather we should sign the deal with countries such as Brazil and South America which have higher tax structure as compared to Indian market.
As per Mr. Sriram Vats, Managing Director of Wheels India Ltd. The government should promote domestic manufacturing and hence should not remove the import duty of vehicles as well as auto components. The current import duty on Vehicles is around 60% and for auto components is 7%-12%. The officials at ACMA say the removal of import duty would lead OEM’s not to manufacture the vehicles in India and hence would not promote domestic manufacturing and more jobs.
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