Govt Unlikely To Cut Tariffs On Fully Built Auto Units Under Indo-Asean FTA

New Delhi: Concerns of the domestic auto industry have been allayed with the Government unlikely to decrease tariffs on the import of completely built units (CBUs) of cars and bikes during the upcoming Indo-Asean free trade agreement (FTA) talks. There will be no tariff concessions on completely built units with regard to the FTA with Asean countries. In the case of the auto component industry the Government was likely to maintain 50 products in the negative lists. Currently, the Government has received negative lists from Malaysia and Thailand and hopes to receive the lists from other Asean countries in the ministerial meet to be held in the last week of August.

The industry had refused the Government''s attempt to include certain models of passenger cars and auto components in the sensitive list where tariffs were likely to be brought down to 5 per cent. The proposed move was seen impacting the investment and competitiveness of the domestic auto industry. At present, the import duty on CBUs of cars and bikes stands at 60 per cent in addition to which other taxes amounting to 13-14 per cent are levied. This has led to companies like Daimler Chrylser, BMW, Hyundai, Ford, Toyota, Nissan-Renault set up their manufacturing base in the country to make the prices of their products competitive for the domestic market. With most of these players having their manufacturing base in Thailand and other Asean countries, diversification of current investments in the domestic auto industry to these countries had been a matter of concern.