Undue Sops. Lobbyism and Indo-EU FTA
|A SLS AMG would be as low as ₹ 1.34 crore if tax cuts make their way|
The cuts, if implemented, will help European companies sell some of their marquee brands at mouth-watering competitive prices. Luxury and posh sports cars would become cheaper by almost a crore of rupees. It is believed that fully-built car imports from European countries
could see half of the 60 per cent basic customs duty waived off,
especially for large and premium vehicles. The Economic Times says that a Mercedes SLS AMG, which is currently sold at ₹ 2.44 crore, would be as low as ₹ 1.34 crore once those cuts in import duties.
An Audi R8 will cost just ₹ 74 lakhs against the present ₹ 1.34 crore. A BMW 7 series, Volkswagen Pheaton and Audi A8 would be cheaper by around ₹ 40 lakhs. This may bring a sense of bliss among the upper class consumers, but they are the only people in India to be offered maximum advantage by every economic policies. The reality is more than what meets our eyes.
similar to those likely to be offered to European auto companies. They demand a level playing field. Now, this has become a bilateral
issue between India and Japan!
|Volkswagen is one of the largest European group to operate in India|
The proposed FTA may have serious consequences on foreign investments in the sector. Imports may be preferred by the Europeans instead of local manufacturing in India. They account for about 5 percent of market share, but is increasing in terms of sales. Major auto-giants such as Volkswagen group, Daimler, Renault and Fiat are making substantial investments for manufacturing in India. Peugeot-Citroen is establishing a new plant at an investment of about ₹ 4,000 crore. An increased local making cost would reduce further investment and expansion in the domestic car industry and its export potential will be severely impacted too.
Image Courtesy: www.carazoo.com, www.thenational.ae