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India pushes for strict rules of origin in UK trade pact for auto sector
Industry News- Sep 12,24
The Rules of Origin dictate the minimum processing required in the FTA country—in this case, the UK—for a product to be considered as originating from that country.
India is advocating for stringent Rules of Origin in the ongoing free trade agreement (FTA) negotiations with the UK, particularly concerning the automobile sector. Commerce Secretary Sunil Barthwal emphasised the need for these rules to ensure they do not negatively impact the Indian automobile market.
Addressing auto industry leaders, Barthwal stated, "We are keen on opening up the automobile market, but it is crucial that we maintain a level playing field with the UK." He highlighted the importance of carefully negotiating the Rules of Origin to prevent any adverse effects on India’s auto industry.
The Rules of Origin dictate the minimum processing required in the FTA country—in this case, the UK—for a product to be considered as originating from that country. This provision prevents countries from exporting goods to India by merely relabeling products from third countries, ensuring that they undertake significant value addition.
Barthwal also noted that India's Production Linked Incentive (PLI) scheme for the auto sector should remain unaffected by the FTA until its designated period ends. The PLI scheme, approved in 2021 with a budget of Rs 259.38 billion, aims to boost domestic manufacturing, including for electric and hydrogen fuel cell vehicles, and to incentivise advanced automotive technologies.
The India-UK FTA negotiations, which began in January 2022, have faced delays, with the 14th round of talks being stalled due to the general election cycles in both countries. The Indian industry is seeking greater market access for skilled professionals and zero customs duty on several goods, while the UK is pushing for reduced import duties on items like scotch whiskey and electric vehicles, as well as expanded service sector opportunities.
Barthwal also highlighted significant export opportunities for Indian auto manufacturers in markets such as the European Union and Africa. He noted that while the US market is competitive, its size presents substantial opportunities for Indian exporters.
(Business Standard)
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