Car exports to the European Union, which saw a negative trend beginning two years ago, may face another blow starting January 2014 with the EU set to raise the current 6.5% Customs duty to 10%.
The move, which would significantly increase costs by around INR 15,000 per car, comes as part of the EU’s new policy of denying preferential tariff to exports from developing nations that have become sufficiently competitive and no longer require a tax incentive.
Meanwhile, Indian auto makers are grappling with the declining demand and profits in the domestic market.
The EU is the single largest trade bloc for car exports from India. Around 40 per cent of India’s total passenger vehicle exports (5.54 lakh units) in FY13 went to the region. Of these, 80 to 90% were small cars.
Nissan-Renault, Hyundai and Maruti Suzuki, followed by Ford and Mahindra are currently among the largest exporters of passenger vehicles from India to the 28-nation union.
The EU’s decision aims at graduating a host of exports from India such as motor vehicles, bicycles, aircraft, mineral products, chemicals, raw hides, skins, leather, ships and boats, from its Generalised System of Preferences, as imports of each of these products from India has reportedly crossed 17.5% of the overall import of the items into the EU from developing countries.
Source:- steelguru.com
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