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Tag: FTA

  • Government Needs to Review Unfavorable FTAs: CII Chairman

    Government Needs to Review Unfavorable FTAs: CII Chairman

    FTA

    Government Needs to Review Unfavorable FTAs: CII Chairman

    NEW DELHI: The government should reassess free trade agreements (FTAs) with countries like South Korea and ASEAN members that have not been advantageous for India in terms of market access, stated Sanjiv Puri, Chairman of the Confederation of Indian Industries (CII). However, he noted that trade agreements with the UK, EU, UAE, and Australia have been beneficial for the Indian economy.

    The Global Trade Research Initiative (GTRI) in Delhi reported that India’s merchandise trade deficit surged by 302.9% with ASEAN countries and by 164.1% with South Korea. This comparison was made using data from the pre-FTA period (2007-09) and the period between 2020-22. India had established trade agreements with these countries in 2010-11. During these periods, India experienced a higher growth rate in imports compared to exports when trading with these nations.

    Puri also highlighted the potential for the production-linked incentive (PLI) scheme in sectors like textiles and toys, citing its success in new-age and traditional sectors.

    “PLI schemes have been effective in new-age sectors and traditional sectors like food processing. Given their success, we can extend them to labor-intensive sectors and link them to the employment index,” he added.

    Addressing concerns about slow growth in the manufacturing sector, Puri remarked, “Recent policy interventions have strengthened financial sector balance sheets, improved corporate balance sheets, rationalized corporate income tax, and introduced PLI schemes and FTAs. These measures have positively impacted manufacturing, and we are moving in the right direction.”

    He emphasized the need to build on this momentum through continued reforms in factors like cost, land, labor, and improving ease of doing business to make the ‘Make in India’ initiative more competitive.

    Puri also expressed optimism about a revival in rural consumption, given favorable monsoon predictions.

  • India Has Sufficient Domestic Tyre Capacity; Imports Should Not Be Liberalised Through FTAs: ATMA

    India Has Sufficient Domestic Tyre Capacity; Imports Should Not Be Liberalised Through FTAs: ATMA

    tyre manufacturing

    India Has Sufficient Domestic Tyre Capacity; Imports Should Not Be Liberalised Through FTAs: ATMA

    India has ample tyre manufacturing capacity, and imports should not be liberalised through free trade agreements (FTAs) with duty concessions, according to the Automotive Tyre Manufacturers’ Association (ATMA). The industry body emphasized that domestic manufacturing capabilities in the automotive tyre sector are strong enough to make imports unnecessary, as communicated to the government.

    This feedback was provided in response to the government’s inquiry about sectors where India can achieve self-reliance, to ensure that upcoming FTAs protect domestic industries, ATMA stated.

    ATMA highlighted that India’s domestic tyre industry, one of the largest globally, produces over 200 million units annually across various categories, including two-wheelers, passenger vehicles, commercial vehicles, and off-road vehicles.

    Despite these capabilities, tyres worth over Rs 2,000 crore were imported in the first three quarters of FY24, marking a 27% increase from the same period the previous year, ATMA noted.

    “In recent years, the tyre sector has seen substantial investments, with leading manufacturers investing over Rs 35,000 crore in capacity expansion, technology upgrades, and research and development,” said ATMA Chairman Arnab Banerjee. “As new capacities come online, it is crucial to meet demand with domestic manufacturing rather than imports.”

    Banerjee added that the domestic tyre industry is well-equipped to meet the needs of both domestic and international auto original equipment manufacturers (OEMs) in terms of design, development, and regular supply for all vehicle types manufactured in the country.

    “The industry is ahead of the demand curve in producing all types of tyres. Auto OEMs are not importing tyres as the domestic industry meets their requirements,” Banerjee stated.

    ATMA also pointed out that the domestic tyre industry is a significant employer, providing livelihoods to over 500,000 people directly and indirectly involved in manufacturing, distribution, and related services.

    “Prioritising domestic tyre manufacturing is essential as it supports the livelihoods of over one million rubber growers in the country, with the tyre industry consuming over 70% of domestic natural rubber,” ATMA emphasized.

    By promoting domestic production and leveraging technological advancements, India can strengthen its position as a global leader in the tyre industry while generating employment, promoting sustainability, and driving economic growth, ATMA asserted.

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