FTAs are against Make in India, need to approach EU pact with caution: SIAM

Arguing that free trade agreements (FTAs) with competing countries do not benefit Indian automobile industry, SIAM has called for 28 items, including hybrid, electric cars and three-wheelers to be kept in negative list in all such pacts.

Automobile industry body Society of Indian Automobile Manufacturers (SIAM) said "it is extremely concerned about the way India is negotiating FTAs with various nations and groupings", specially with European Union (EU) which has demanded inclusion of import of completely built units to be included in the agreement.

"SIAM has consistently submitted that FTAs with competing countries do not benefit Indian automobile industry, it is against the concept of Make in India for local value addition and local employment," it said in a white paper.

"Hence, CBUs (Completely Built Unit) of vehicles and engines should be kept in India's Negative List under India-EU FTA, RCEP (Regional Comprehensive Economic Partnership) Agreement," it added.

In the paper titled Trade Agreements that may Jeopardize 'Make in India' Programme for Automobiles, SIAM said, "India has signed FTAs with several important partners in the last few years and has witnessed a worsening of trade balance whenever it is with a major manufacturing economy like ASEAN, South Korea, Japan."
On FTA with RCEP, which includes China, ASEAN, South Korea, Japan, Australia and New Zealand, SIAM said, "In our FTAs with Japan, Korea and ASEAN, we have not included automobile CBUs and there is no reason why we should include them under RCEP at this stage."