Trade agreements negotiated after extensive consultations with sectoral chambers and stakeholders
Noting instances where vehicles were reportedly not being exported because their Indian designs were considered suboptimal compared to globally sold models, Commerce and Industry Minister Piyush Goyal has urged the auto industry to ensure that products manufactured in India meet global standards.
He has cautioned Indian companies not to produce products of a different quality for India compared to their international or domestic markets.
The Minister pointed out that the Government was opening pathways to tremendous opportunities for the automotive industry through trade agreements.
He highlighted that nine trade agreements had been finalised in the last four and a half years, covering economies with a combined GDP of around US$60 trillion.
“This represented a major shift in India’s approach, reflecting the self-confidence of “New India”, the pace of reforms and the transformation of India’s ecosystem,” said Goyal in his address to the 66th SIAM Annual Convention.
He called upon the Indian automotive industry to seize the opportunities emerging from India’s expanding trade partnerships, growing domestic market and global shifts in manufacturing.
He urged the industry to deepen localisation, invest in technology, innovation, research and development, expand exports and prepare itself to serve global markets.
Goyal said the India-EU agreement, described by the European Commission President as the “mother of all deals”, would be operational by next March, urging the automotive industry to prepare to leverage the opportunities.
The UK agreement was already operational, providing, to his understanding, 100 per cent access for most auto components at zero duty, he added.
The Minister said India’s trade agreements had been negotiated after extensive consultations with hundreds of sectoral chambers and stakeholders. “The Government had consulted not only line ministries but also private-sector associations and groups of companies, and that every trade agreement, bilateral trade agreement and preferential trade agreement undertaken by the Government had been widely welcomed.”
In the US bilateral trade agreement, not a single Indian sensitivity had been compromised, including those relating to farmers, fishermen, MSMEs, workers, handloom and handicraft sectors and industry, he reassured.
“The Government had protected India’s sensitivities to the highest extent possible through consultations and that the agreement represented only the first tranche, with continued engagement with stakeholders to follow,” said Goyal.
India had recorded US$863 billion in exports of goods and services last year and set an ambitious target of $1 trillion for the current year. Exports were growing at around US$9 billion a month during the first five months, with merchandise exports growing faster than services after many years.
But with a gap of around US$29 billion to the target over the remaining seven months, he urged industry to raise the monthly pace to US$12 billion, or rather aim high and fall short than set a suboptimal target, expressing confidence that India and its 1.4 billion people had the capability to achieve the target.
Goyal said AI would help the automotive sector expand capabilities, improve efficiency and competitiveness and enhance customer service, while creating new job profiles, stressing that “job roles may change, but jobs will grow”.
He said technology adoption was essential for inclusive and sustainable growth and that resilience extended beyond supply chains to business plans, innovation, R&D, technology, skill development and talent, with AI playing an important role in building resilient and sustainable mobility for Viksit Bharat.
Goyal said sustainable mobility should go beyond replacing petrol and diesel vehicles with electric vehicles, noting that companies often presented different comparisons on EVs, hybrids, battery imports and energy sources depending on their product portfolios. He stressed that sustainability must have both environmental and economic dimensions and questioned claims of indigenisation involving only 10-15 per cent value addition to imported goods.
Pointing to actual performance, he cited India’s export of around one million cars last year, growing exports by Maruti and the emergence of world-class electric vehicles from Tata Motors and Mahindra, including Maruti’s exports of electric cars.
Goyal said the automotive sector had strong growth potential, with ACMA reporting around 16-17 per cent growth and several automobile companies recording over 20 per cent growth, driven by rising incomes and aspirations. He also highlighted growing demand for two-wheelers and premium vehicles, supported by expanding highways and around US$130 billion in annual investment in road infrastructure, while stressing the need for better road quality.
He went on to urged the automotive industry to look more actively at export markets, saying that exports could potentially double every two years. “Perception that Indian automobiles were made only for India was changing, with India-designed electric vehicles being engineered in Britain and Europe demonstrating the potential of global partnerships.”
He said resilience would come from partnerships and urged companies to further deepen localisation.
He informed that the Government was monitoring company-wise import-export data to assess actual levels of indigenisation and urged companies unable to localise certain products to compensate by expanding exports. He assured the industry that the Government was willing to create the necessary enablers and extend support wherever required.
“As the global environment became more complex, India was seeking to secure the “four M’s of mobility” through trusted global partnerships, namely molecules, modules, megawatts and markets,” said Goyal.
Goyal said the Government was willing to support large automotive and auto-component projects through land and plug-and-play infrastructure and invited industry to identify locations for such ecosystems. He also offered to facilitate country-specific industrial parks based on industry demand. Fiinews.com
