After the opposition from the Japanese automakers’ camp on the reduction of import duty on cars imported by the European carmakers and similar concerns voiced by South Korean companies, American automobile manufacturer General Motors has joined the cause of the non-European car manufacturers that have significant business interest in the Indian automobile industry. The US based auto major is the third largest foreign investor in the automobile sector in India after Japanese Suzuki and South Korean Hyundai.
Like other non-European automakers, General Motors demands that the duty cuts on imports should be applicable for all automobile manufacturers and hence should be extended to the other free trade agreements (FTA) as well. With the implementation of the proposed 30 percent reduction in the import duty on cars as part of the EU FTA, the European car manufacturers are likely to enjoy an edge in the Indian market in terms of car pricing over the other auto makers.
Apart from the fear of the losses that non-European manufacturers may incur in terms of losing market share to European car makers, there is another concern put up by industry analysts. With reduction in import duties, European manufacturers may refrain from investing further into the manufacturing and production facilities in India, thus reducing opportunities of new job creation.