On what his company would do, Bhargava said: “We (Suzuki) have a manufacturing facility in Hungary, so we cannot compete from India on the same models with them. Of course they (the Hungary unit) don’t make all the models, so we have to study the scope of the opportunity of small cars in Europe. But yes, there is a large enough small-car market in Europe. We in India have a cost advantage while European companies making small cars are not competitive. The door has been opened by Europe.”
He added with import duty on electric cars for vehicles exported from India to eventually go to zero (for vehicles running on the internal combustion engine, they will go to zero from 10 per cent now) as envisaged in the FTA, it would provide an advantage for companies like Maruti Suzuki to manufacture the models in India and ship them to Europe. The firm is exporting its electric Vitara to Europe.
The FTA will allow European carmakers to export to India at a lower duty of 35 per cent to begin with, eventually going down to 10 per cent. It also sets an annual quota of 250,000 imported cars, which have to be priced above ₹25 lakh. But does this give enough protection to Indian carmakers? Bhargava said: “Do we want protection even after over 75 years (of independence)? The fact is hardly any of them makes high-end luxury models like BMW or Merc, except a few. European carmakers will want to bring their high-end cars to India, where they have high margins. However, I am not so sure whether Ferraris will be imported because they would be unaffordable even with lower duties.”
One key question for European luxury carmakers would be to weigh the options of importing high-end cars or assembling them in India, Bhargava said. In the latter case, the duties are now being halved to 8.2 per cent under the FTA.
“It’s an economic call they have to take,” he said.
 "RC Bhargava, Chairman Maruti Suzuki")