India to raise with S Lanka steep hike in auto import tariff

"We have raised the issue in Colombo today through our mission. We will also be raising it diplomatically with Sri Lankan Finance Secretary, who is coming here shortly," official spokesperson in the Ministry of External Affairs said.

The issue was raised a day after the Commerce Ministry expressed concern over the hike and indicated that India will take it up with Sri Lanka.

"Sri Lanka is a very important market as far as cars and commercial (vehicles) are concerned. Obviously, we are concerned about it. We believe that the very substantial rise in import tariff in Sri Lanka is going to adversely affect our car exports to that country," Additional Secretary in the Commerce Ministry Rajeev Kher has said.

Recently, the neighbouring country has increased import duties on vehicles by almost 100 per cent, which has adversely impacted exports from India, Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur has said.

"Last year, India had exported vehicles worth USD six billion out of which automobiles worth USD 800 million had been sold in the Sri Lankan market. Now this has almost gone," Mathur said.

Earlier, the increase in duties affected exports of small cars, two wheelers and three-wheelers from India. Just two weeks back, they had increased duties on sports utility vehicles as well, he added.