India - EU Free Trade Agreement

[AMG]

European and Indian Union are now on talking terms in order to sign Free Trade Agreement for exporting European bikes with lesser duties and VAT. Both European and Indian unions are looking forward for bilateral trade with reduced government duties. This has always been a dream for High end Indian Bike lovers to have such bikes at its actual cost. How does affordable range of Ducati and BMW Motarrad sound? Yes I know pretty pleasing to ears.

This news article from us will surely grab a lot of eyeballs from all over the country as it focuses on getting high end European bikes at affordable price range. This Free trade agreement has been scheduled to be signed by the end of this month. Once this treaty has been signed, it will remove all the trade duties which were earlier functional by both the parties. This will automatically reduce the CBU (completely built units) by thirty eight percent. This will be a major relief to both the countries. Earlier Imported bikes engrossed sixty percent duty followed by VAT extra. So the pricing of the bikes goes to 110 percent than its actual price. If you prefer a bike of 500,000 until it hits the Indian roads its price goes upto 100,000. This hefty tax duty applied on such bikes was another reason for the slow and steady sales of imported bikes. The European Union and India impact will officially grab a lot more consumers and will make European giants like BMW, KTM and Ducati a lot easier on pocket. These bikes will no longer be a dream for the many bike enthusiasts of India.

Once the treaty is signed the CKD (Completely knocked down) on imported components will also be slashed by around nine percent. This way European Giants will have a lot more advantage as compared to Japanese makes. These European bikes can even prove to be a tough contender to the newly launched Korean brand Hyosung. Although Japan is not much affected by this deal as India has already signed free trade contract wherein the scrap tariffs will be ninety four percent less as compared to earlier times. Indian government has however pledged to reduce or minimize the duty tariffs on auto parts specially built of steel. But this would be like an ant in front of the elephant where the European makers are receiving 38 percent of reduced duties. Once these bikes are on road they can now be explored to fullest with reduced tax duty. Source: Indian Drives

 

[AMG]

Re: India-EU free trade agreement

That means cheaper Ducatis and Aprillias.

 

[AMG]

Re: India-EU free trade agreement

I wonder when the govt. will implement it?

I really want a cheaper Hypermotard at 4 lakhs.

 

[visran]

pay just 10% duty on Porsche and BMW

You may have to pay just 10% duty on Porsche and BMW; India in talks with EU to slash tariff.

Cars manufactured in the European Union, including luxury makes such as Porsche and BMW, could be available in India at prices only marginally higher than in Europe as the government is likely to agree to a 10% duty on a fixed quota of cars imported from the EU as part of a free-trade agreement being negotiated between the two sides.

India is considering allowing imports of 2.5 lakh car on which only a 10% tariff will be levied, compared to the normal rate of 60%, marking the first significant challenge the heavily protected Indian automobile industry has had to face from imports. The imports will be spread over five years, starting with 40,000 cars in the first year and rising by 5,000 units every year thereafter.

"We may bring down tariff to a low level of 10% for a fixed quota of cars every year for five years. We think our industry can deal with this," a government official told ET.

New Delhi is also considering reducing import tariffs by half from 60% to 30% for cars outside the quota once the proposed India-EU free trade agreement is implemented.

The European Union is keen that India commit itself to extending the liberalized import regime for the quota of 2.5 lakh cars beyond five years, but New Delhi has said that it will review the situation after five years.

"We want to keep some room for maneuver if the need arises,' the official said. Greater market access for automobiles, wines & whiskies is on top of the EU's wish list for the FTA, formally called the bilateral trade and investment agreement.


In exchange, India expects to get more visas for its professionals, a relaxation of EU norms that require manufacturers keep elaborate database on chemicals used in their products.

India's wishlist also includes recognition as a data secure country for carrying out off-shore operations, a quality certificate for its herbal products and lower duties on labour intensive products such as leather and textiles.

The concessions on automobiles and alchohol, if they form part of the final agreement, will be unique as they are absent in similar agreements it has entered so far with countries like Singapore, Japan, Malaysia, South Korea, Sri Lanka and the ten-member Asean.

The Indian automobile industry has criticized the government's move to liberalise imports.

SIAM has warned that imports will deter investments as foreign car makers would prefer to export their cars to India rather than set up manufacturing facilities.

French carmaker Peugeot has put off its plans to invest in India, reportedly, in the hope of reaping benefits of lower duties once the India-EU FTA gets implemented.

Automobile Industry India, Auto Industry News, Automotive Industry, Automobile Market | Industry News - Economic Times

 

[S Class]

Re: pay just 10% duty on Porsche and BMW

You may have to pay just 10% duty on Porsche and BMW; India in talks with EU to slash tariff.

For long I wished for this, finally something good.

 

[visran]

Re: pay just 10% duty on Porsche and BMW

For long I wished for this, finally something good.

I am sure Japanese and American's wouldn't be happy if this rule get's executed.

 

[S Class]

Re: pay just 10% duty on Porsche and BMW

I am sure Japanese and American's wouldn't be happy if this rule get's executed.

Japs are in mostly petrol & hardly any model above 20L so don't sell much while Americans are not bought in any case. Why bother about custom duty then ?

 

[visran]

Cars from Europe Set To Become Cheaper

Read this article on TOI, if implemented apart from the German trio even JLR will also be benefited.

Come 2017, you can hope to drive in the latest Audi or BMW at a considerably lower price as the government may lower the import duty to 30% by then and scale it down further to 20% in 2020 as part of the Broad-based Trade & Investment Agreement ( BTIA) with the 27-nation bloc.

In case of automobiles, when to reduce import duty to 30% is a bone of contention. EU is demanding that the levy be slashed to that level in 2017 itself, while Indian negotiators had got the Trade & Economic Relations Committee headed by the prime minister to agree to the cut sometime around 2022. The current tariff for import of automobiles is 100%, although the notified rate, which is applied to new cars, is 60%.

A reduction in customs duty is expected to be more beneficial for high-end cars, which are imported as completely built units given the low volumes. Smaller cars are usually manufactured locally using local parts although some components are imported. But there is a fear that several European carmakers who do not have manufacturing facilities in India may opt for the import route and would refrain from setting up plants here.

India set to allow cheaper wines, cars from Europe - The Times of India

 

[dharmesh]

Re: Cars from Europe Set To Become Cheaper

That's great news. But does this means, Indian companies would be forced to reduce the price of their cars as well??? .

In any situation customer wins.

 

[S Class]

Re: Cars from Europe Set To Become Cheaper

This is fantastic news, all my beloved beauties come from Europe.
Indian manufacturers may not be affected much as there is no one in premium luxury segment. And yes, it will be very beneficial for Tata motors as they own JLR. And if M & M buys Aston Martin, then it will benefit them too.

 

[350Z]

Here’s an update on India-EU Free Trade Pact. Source: Times of India.

The government has run out of patience and will ask the European Union to sign a free trade deal "within a narrow political window" as India is unwilling to offer further tariff cuts for automobiles and has no room to provide flexibilities on pharmaceuticals and government procurement. Top government sources said commerce & industry minister Anand Sharma has been advised to deliver a stern message to Karel De Gucht, his European counterpart as EU's list of demands seem unending even seven years after negotiations began. Sharma could not be reached for comment as he was travelling overseas, while commerce department officials refused to comment.

On India's demands, EU has refused to grant "data secure" tag to information technology companies and instead give data adequacy status, something that has also been given to the US. Data secure status will make it easier for mid-rung Indian companies to bag contracts in most of Europe. The sources said the issued raised on pharma related to pricing regulations, patents, counterfeit medicines and access to cheap drugs, which do not relate to FTAs, a position that has been clearly articulated to Brussels on several occasions.

Similarly, on government procurement, EU has demanded commitments based on the proposed public procurement law, which has not even been placed before Parliament. While India is willing to engage on the issue once the law is enacted, the trading bloc sees it as a critical element of any deal. EU is pushing for preference in government purchases for European companies, which is unacceptable to India. New Delhi has said it will only ensure that orders above a specified value are bid out and European bidders are not at a disadvantage.

The third issue that is holding up talks is EU's demand for a steeper tariff cut on automobiles that goes beyond the government's offer to lower import duty to 10% for a specified number of vehicles, and reduce it to 30% for cars beyond the threshold. But EU wants a shift towards zero duty and government says it is not possible.

The sources said EU is raising issues at the last minute, while the political window for a deal is narrowing given the impending general elections next summer. They pointed out that Indian negotiators had participated in the talks last month with the impressions that negotiations have to be concluded soon. But EU doesn't seem to be heading for a political closure before September — instead of the agreed deadline of July. As a result, signing the deal cannot take place before March or April 2014, when India will be in the midst of general elections.

Drive Safe,
350Z