India-EU FTA To Drive Auto Investments, Integrate India Into European Value Chains

 New Delhi: The government is hopeful that India-EU free trade agreement will help attract greater investments into India and boost automobile manufacturing in the country. The two sides on January 27 announced the conclusion of negotiations for the trade pact and the pact may come into force from next year.

Additional secretary in the commerce ministry Darpan Jain said that the auto sector appeared to be a challenging area during negotiations for the pact as India has high import duties, but the country has converted those challenges into opportunities through the agreement. “India has provided quota-based, long-phased solutions in the sector so that there are concessions also to the EU but at the same time the Indian industry also gets adequate protection,” Jain said.

“It will result in more investments into India and will result in more manufacturing of automobiles in India and exporting to third countries. So India will be integrated into the EU's value chain,” he said here while addressing a conference on India-EU trade agreement, which was organised by industry chamber Ficci.

“Prices of imported European cars are widely expected to come down after India agreed to gradually reduce duty under its FTA with the EU to 10 percent from 110 per cent for 2.5 lakh vehicles a year, over six times more offered to the UK. On Social Security Agreements (SSAs) with European Union members,” Jain said.

India already has this pact with 14 countries out of 27 EU members. “Seven we are negotiating and 6 more are being planned. These pacts help avoid double contribution to social security funds by Indian professionals working for a limited period in the European Union member nations,” he said.