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 free trade agreement (FTA) with the European Union (EU), saying such concessions must be ‘calibrated’ to avoid hurting domestic manufacturers, particularly MSMEs. He said that if duty concessions to the 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.
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. He said any concession must therefore be linked to clear reciprocity, phased timelines, and safeguards to ensure India's manufacturing base continues to grow. He also said that the new trade agreements have helped improve market access, reduce duties, and bring in long-term investment commitments that support manufacturing, technology, and services.
He further said many sectors are seeing better export traction, though MSMEs still need support to fully leverage these opportunities. Looking ahead, any potential FTA with large advanced markets including US and EU must carefully address reciprocal tariff expectations, regulatory standards, and sensitive product lines. He noted that if designed well, such agreements can significantly enhance India's competitiveness and help industries integrate more deeply into global value chains.
