Duty concessions on auto components in FTA need calibrated approach: Assocham

Assocham President Nirmal Kumar Minda has cautioned against a blanket reduction in import duties on auto components under the proposed trade pact with the EU, saying such concessions must be "calibrated" to avoid hurting domestic manufacturers, particularly MSMEs.

He said that if duty concessions to the European Union (EU) under the proposed agreement provide domestic players access to advanced technology, larger markets and stable supply chains, there is merit in considering them, particularly for products where India has a cost advantage.

"But a blanket reduction may hurt domestic suppliers, particularly MSMEs, as EU components often come with strong scale, automation and subsidies," he said in an emailed interview.

India and the 27-nation EU bloc have been negotiating a trade pact since 2007. On December 9, the two sides concluded a high-level meeting on the pact. The EU is seeking concessions in import duty in the country's automobile and components sectors.

Duty concessions on auto components in an FTA (free trade agreement) need a very calibrated approach, he said adding with the European Union, the question is not just tariffs but the overall competitiveness equation.

Minda is also Chairman and Managing Director (CMD) of Uno Minda, a leading auto components maker. "Any concession must therefore be linked to clear reciprocity, phased timelines, and safeguards to ensure India's manufacturing base continues to grow," he said.