Financial Daily from THE HINDU group of publications
Sunday, Mar 20, 2005
Financial Daily from THE HINDU group of publications Sunday, Mar 20, 2005 |
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Industry & Economy
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Foreign Trade India must be wary of signing FTAs, says Sona Koyo's CMD R.Y. Narayanan
Mr Surinder Kapur
Coimbatore , March 19 THOUGH the expectation that the Union Finance Minister, Mr P. Chidambaram, would announce a cut in excise duty on automobiles in the Budget was belied, it did not have any adverse impact on the automobile industry, said Mr Surinder Kapur, Chairman and Managing Director, Sona Koyo Steering Systems Ltd. He feels that the Government should take industry into confidence before signing Free Trade Agreements (FTAs) with other countries so that the interests of domestic manufacturers are safeguarded. Speaking to Business Line here, he said there was an expectation that a reduction in excise duty (to 16 per cent for the automobile industry) would be announced in the Budget. But this did not happen. He said, "There is no justification except to say that excise duties and import tariffs are coming down in general." Asked whether the Government's decision to leave the excise duty untouched had created an adverse impact on the automotive sector, Mr Kapur said, "No, I don't think it has." He felt that if the excise duty had been cut, the chances were that the market for automobiles would have expanded. The industry had expanded by more than 20 per cent this year. "Frankly, you can't complain that our industry is not expanding, therefore please reduce excise duty." On the impact of the FTA signed by India and Thailand on Indian industries, he said, "Everybody recognises today that this could have been done in a much better way." The industry could have been consulted and it would have probably given some inputs. He said, "The Government, I believe, did this for political reasons." But it should understand that FTAs are "economic instruments and not political instruments." There is a need to involve the industry to understand the implications of the FTA. He said it is now known after a detailed study (supported by trade figures) that Thailand has an edge over India as far as the FTA is concerned. He hoped that in future "the FTAs will be much better organised."
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