EY expert: Agreement with the EU will not mean a significant increase in car exports to India
Prague – According to EY automotive expert Petr Knap, the trade agreement between the EU and India will not bring a fundamental increase in car exports to the very demanding and competitive Indian market. Rather, it opens up opportunities for highly specialized suppliers. Knap stated this for ČTK.
The trade agreement, after years of negotiations, was announced today in Delhi on behalf of the EU by the President of the European Commission Ursula von der Leyenová and on behalf of India by Prime Minister Naréndra Módí. The agreement is mainly intended to open up new opportunities for European exports. It is expected that the arrangement will double exports from the EU to India. Tariffs on more than 90 percent of EU goods exports will be reduced or abolished, which could mainly benefit the European automotive industry.
According to Knap, domestic suppliers can make use of cooperation with carmaker Škoda and the Volkswagen Group, which already manufactures in India, or they can establish joint ventures with their own Indian partners. He also sees an opportunity for exporters of high-tech components, where there is less pressure on localization.
As for imports into the EU, the agreement will not fundamentally change the situation, he said, because imports of Indian cars into the EU are already subject to a ten percent tariff. Import duties into India are currently 110 percent. Under the agreement, they will gradually be reduced to ten percent. For car parts, they will be completely abolished after five to ten years.
Škoda Auto, which produces the Kushaq, Kylaq and Slavia models in India and is responsible for the entire parent Volkswagen Group in the Indian market, according to spokesperson Michaela Sklenářová, welcomes positive political signals aimed at liberalizing trade relations between the European Union and India. “India represents a dynamically growing market and has fundamental strategic importance for the Volkswagen Group,” she told ČTK. The company wants to assess the impact of the agreement on the Group as soon as the details are known. (January 27)
