December 10, 2012 11:31 pm
India may take up with Sri Lanka the latter’s decision to hike import duty on cars at diplomatic level. Hiked duty on passenger cars and commercial vehicles by Sri Lanka will have large implication for Indian exporters.
“We believe very substantial rise in import tariff in Sri Lanka is going to adversely affect our car exports to that country. It is matter of concern for us, and the option available before the government is to take up the matter diplomatically,” Rajiv Kher, additional secretary in India’s commerce ministry, said. Kher, who is not directly involved in exports to Sri Lanka, was speaking on the sidelines of a curtain raiser for the second India-Asean business conclave held by Ficci.
According to Kher, bringing down tariffs on imports of cars from India could be a win-win situation for both the countries as India is very competitive in small cars, as well as commercial vehicles. “It makes lot of sense that they bring down the duties and Indian imports are allowed to move freely,” he added.
The import duty on cars in Sri Lanka has gone up from 120-291 per cent to 200-350 per cent, from 51-61 per cent to 100 per cent on three-wheelers, and from 61 per cent to 100 per cent on two-wheelers.
According to estimates by the Society of Indian Automobile Manufacturers, India exported vehicles worth $800 million to Sri Lanka out of the total automobile exports of $6 billion. However, this has become negligible this year as the revised import duty came into effect from April. Moreover, two weeks back even import duty on sports utility vehicle has gone up, thus creating further dent in exports to Sri Lanka.
Meanwhile, just ahead of the Asean-India Commemorative Summit, being held here from December 20 to 21, India is hopeful of concluding the India-Asean free trade agreement on services and investment, despite some issues still waiting to be resolved. - mydigitalfc.com