India-EU FTA To Drive Auto Investments, Integrate India Into European Value Chains

New Delhi: The government is hopeful that the India-EU free trade agreement will help attract more investments to India and increase automobile production in the country. The two sides announced on January 27 that negotiations on the trade agreement had been concluded and that the agreement could come into force from next year.

Darpan Jain, additional secretary, ministry of commerce, said the automotive sector seemed to be a challenging area during deal negotiations as India had high import duties, but the country turned these challenges into opportunities through the deal. “India has provided quota-based, long-phased solutions in the sector, so that concessions are also given to the EU, but at the same time, the Indian industry also has adequate protection,” Jain said.

“This will lead to more investment in India and more automobile production in India and exports to third countries. Thus, India will be integrated into the EU’s value chain,” Ficci said while speaking at a conference on India-EU trade agreement organized by the chamber of industry.

“Prices of imported European cars are expected to fall after India agreed to gradually reduce duty under the FTA with the EU from 110 per cent to 10 per cent for 2.5 lakh vehicles per annum, more than six times what was offered to the UK on Social Security Agreements (SSAs) with members of the European Union,” Jain said.

India currently has this agreement with 14 of the 27 EU members. “We are negotiating on seven agreements and 6 more agreements are planned. These agreements help prevent double contributions to social security funds by Indian professionals working in European Union member states for a limited period of time,” he said.