Auto players seek EV protection in EU pact

NEW DELHI: As Indian and European negotiators enter what is seen to be the final rounds of talks for a free trade agreement (FTA), the local auto companies are wary of Chinese electric vehicles using European Union as a gateway to enter the domestic market at lower duty.

As a result, auto players have demanded that govt negotiate the agreement in such as way that if needed, only high-end EVs are allowed into the country — with a high price threshold and in limited numbers — while also insisting on a high level of value addition, which could be 50% or more, people familiar with the deliberations told TOI.

In the trade deal with the UK, which was signed last year, govt had protected EVs but the auto industry also realises that there are trade-offs to be made for a successful outcome.

The worry, however, is bigger in the case of the European Union, given that some of the Chinese companies could use member nations of the trading bloc to locate assembly units and ship goods to India, taking advantage of the duty benefit. Some of the Chinese companies that have been hovering around have not been able to set up shop in the country due to checks on FDI and have been relying on imports to sell in the Indian market. “We are seeing Indian companies work hard on EVs and also move up the value chain. It is important to protect them at this time so that we have a strong eco-system for green vehicles before it is opened up to competition,” said an industry executive.

Several global majors, including the likes of Tesla, Mercedes and BMW, are expected to use their European facilities to export EVs to India, a large and growing market where govt is also keen on a transition to green fuel. While Tesla is currently importing its vehicles from its Chinese facilities, lower tariffs are expected to result in shipments from the company’s German plant.

The Centre’s scheme to allow lower duty import of electric cars for a limited period in return for investment in three years saw no response as some of the auto makers are waiting for the trade deals to be finalised before taking a call on their plans.

Goyal seeks investment from Liechtenstein

Commerce and industry minister Piyush Goyal on Wednesday invited companies from Liechtenstein to invest in India and leverage the India-EFTA trade pact to expand their presence. India and the four-nation European bloc EFTA implemented a free trade agreement last year. Goyal was in Liechtenstein for an official visit.