Piyush Goyal says India will become global car manufacturing hub, European firms to follow
Commerce and Industry Minister Piyush Goyal on Monday said India was set to become a global hub for car manufacturing, adding that European automakers would prefer to manufacture vehicles in India as strict regulations in Europe could make production there less competitive.
“Finally India is going to become the global hub for car manufacturing. Everybody is going to come and manufacture in India and with Europe having such crazy regulations, it is going to be impossible to be competitive. All the European manufacturers will come to India,” he said at The Dilli Dialogue.
India offers tariff concessions to UK, EU under trade agreements
India has offered quota-based tariff concessions on car imports from the United Kingdom and the European Union (EU) under its free trade agreements with the two regions.
The India-UK trade agreement came into effect on July 15, while the agreement with the EU is likely to be signed by the end of this year.
Referring to Tata Motors’ acquisition of Jaguar, Goyal highlighted the challenges faced by the Indian automaker in making the business profitable.
“I do not know if you are aware. Tatas had so much trouble after they bought Jaguar. Tata Motors itself was going to collapse and then they put in a lot of re-engineering, and shift some models to India…Finally they were able to make money after years,” he said.
Goyal flags concerns over European regulations
Although the minister did not specify which European regulations could affect the competitiveness of carmakers, India and some other countries have raised concerns over the EU’s Carbon Border Adjustment Mechanism (CBAM).
The mechanism imposes a carbon-related cost on certain imports into the EU, with implications for industries and countries exporting goods to the bloc.
Goyal said international automobile manufacturers would increasingly look to India as a production base as domestic demand reached a commercially viable scale.
Luxury carmakers, electronics manufacturers may boost investment
Discussing the tariff quotas for car imports under the trade agreements with the UK and the EU, Goyal said the concessions largely covered expensive vehicles, while the lower-priced car segment remained protected.
He also cited the example of luxury carmakers that initially tested the Indian market before setting up manufacturing facilities in Pune. According to the minister, such investments demonstrated India’s potential to attract global automobile manufacturers and strengthen its position as a manufacturing hub.
Goyal further said rising demand for electronics and white goods could encourage companies to invest in domestic manufacturing, including semiconductor production facilities.
The minister highlighted India’s demographic advantage, noting that its young population offers opportunities at a time when many economies are experiencing ageing populations.
He said there is a demand for Indian workers in countries such as Germany and Japan.
Regarding India’s exports, Goyal said the ministry is targeting USD one trillion worth of exports of goods and services this fiscal.
Both exports and imports are growing, he said. This gives encouragement to domestic industry and international investors.
During April-August this fiscal, exports jumped 17.85 per cent year-on-year to USD 215.91 billion, and imports climbed 18.21 per cent to USD 363 billion.
(With inputs from news agency PTI)
