Indian carmakers have agreed to eliminate import tax on a limited number of vehicles in a trade deal with Britain "if the need arises", newswire Reuters reported.
India at the moment imposes taxes to the tune of 70 percent and 100 percent on the import of cars, which will be whittled down over a period of time, to 10 percent, by the fifth year, albeit for 46,200 vehicles, Reuters reported citing the proposition as suggested by auto lobby to the government. "As a fall back, 0% would also be acceptable, if the need arises during the negotiations," SIAM stated to the commerce ministry, reviewed by Reuters. India and Britain started negotiations in January last year for a trade pact that could double trade to $100 billion by 2030.
Besides this, the automotive body SIAM has also suggested lowering the import duty on cars to 30 percent spanning a 10 year time period. The body is open to assessing further cuts after the five year period, based on the growth of the import volumes from the UK, Reuters reported. Neither SIAM nor the Commerce Ministry responded to queries posed by the newswire.
These reductions are directed towards further opening the market, as per certain experts who believe this might not achieve the desired result, as the number of vehicles is miniscule in the scheme, the newswire stated.
This marks the first time that auto Inc. has agreed to such a reduction, having earlier held the stance that such a move would adversely impact investments in domestic manufacturing, Reuters reported.