Tata Motors too against reduction of car import duties even though UK based Jaguar Land Rover would benefit

Tata Motors too has now gone vocal about proposed import duty cut on cars from Europe despite the fact, the Tata Group would stand to benefit if import duties are reduced as Jaguar Land Rover is UK based. Tata Motors sees reduction in import duties under the Indo-EU free trade agreement (India EU FTA) as a hindrance to Indian auto industry growth, and would ‘distort the level-playing field’. Managing director, Tata Motors, PM Telang had this to say. “It will hinder the growth of the industry and distort the level playing.” “Any short-term policy shift is not advisable.”

Toyota, Maruti Suzuki, Hyundai and Honda have previously voiced their discretion regarding such a proposal coming into being. This is the first time Tata Motors has said something to this extent. While EU is pressing for India to lower import duties on passenger cars, Tata stands firm that this would would not be good for the Indian auto industry. Mr Telang added, “Assembly operations in Australia have gone down drastically after the policy on cars was liberalized.”

Ratan Tata, Chairman of Tata Group had earlier mentioned that “high import duties on cars and components were unrealistic and served as an artificial barrier of protection for local companies”. A Tata spokesperson said, “The duty reduction should happen in general and not as part of an FTA with a particular country.” “Also there should be a timeline for it so that the industry can plan accordingly.”

Praful Patel, and heavy industries minister and Industry body Society of Indian Automobile Manufacturers (SIAM) too have opposed reduction in car import duties. Praful Patel wrote to the Pime Minister. “Our policy of high tariffs along with free market access through investment is paying off well and there is no reason why we should tamper with this policy at this stage.” “We have sensitivities about our automotive industry and EU will have to accept that… significant reduction of tariffs at this stage would encourage imports at the cost of domestic value addition and would adversely affect the investments and employment in the domestic economy.”