Re: Hyundai stops exporting cars from India to Europe Quote:
Originally Posted by harpreetkanwar I for one hope this pressurizes the government to look into FTA's. And why shouldn't the EU hike the duty on cars coming from India in this era of Global Free Trade, when India can't reciprocate the same. A lot of people are moving up to luxury cars and those who have driven them, are saving up for the uber-luxurious ones, the ones that can't necessarily be brought in via the CKD route, owing to the more than double price tag they carry.
Also, the "indian focused cars funda" is just a shame when at the same time we are talking about NCAP like safety programs being implemented in India, if at all this move by Hyundai is a signal towards India's unwillingness to sign the FTA for automobiles.
The argument that Indian manufactures would suffer with the FTA's is simply wrong, it would just make already "cheaply built" cars even cheaper when it comes to Safety, comfort and quality. |
I bed to disagree. The reason the automotive sector is the highlight of the Indian manufacturing sector (along with pharmaceuticals) is that the duty structure ensured that local manufacturing was competitive and protected while being loose enough for components to be imported at reasonable prices. This is the only reason why manufacturers want to open plants here in India. New technology can be brought in using the components route and eventually, there is always a business case for local sourcing of components.
Without such a duty structure, the whole Auto manufacturing sector would not have picked up like it has. India needs to take advantage of its large domestic market and promote manufacturing as a means of employment creation and income generation. FTAs are no good for this.
As regards to this policy restricting the use of new technologies:
This is because cars with lower safety features are allowed to be sold. If safety regulations are made tighter, manufacturers will comply. They cannot afford to leave such a large market. Thus, make it compulsory to have airbags and ABS and the like, and you will have cars with them. In fact, it will also help exports if some arguments about why Hyundai stopped exporting to EU from India made earlier in this thread hold true. |