Saturday, March 03, 2012
By Shilpa Chopra
Diesel cars in India: Proposed higher duty opposed by SIAM
Expressing concerns over the government’s recently proposed move of levying additional taxes on the diesel run cars in India, the Society of Indian Automobile Manufacturers (SIAM) on Friday said that such move will not be of any benefit for the Indian car makers.
It is to be mentioned here that the proposal of raising duties on the diesel for the passenger car segment has been receiving all round objections from auto industry experts and car makers alike. Now, as the industry body SIAM has also joined the league, the Indian government is expected to be forced to rethink over this proposal.
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The industry body said that the Indian government is moving forward towards a contradictory policy on diesel run cars in India. Where at one hand, the government aims to discourage the production and use of diesel run cars and vehicles; on the other hand, they plan to reduce duty on import of diesel run cars from European countries under the proposed Free Trade Agreement (FTA) with EU (European Union).
As per the industry sources, it is believed that that the government of India has made an offer to their counterparts in EU for reducing the all car import tariffs to mere 30 percent from existing duty of 60 percent. While further objecting the government’s proposal, SIAM said that such moves will prove a total reversal of existing policy of imposing high duties to promote investment, manufacturing, employment and value addition in the domestic market.
While comparing the exports figures of Indian to EU and vice versa, SIAM said that while India exports only $1.7 billion worth of cars to EU, exports of EU to India stays much higher at $3.4 billion worth of cars through both CBU (completely built units) and CKD (completely knocked-down units) route.