London [UK], July 25 : The reduction in import duties on automobiles under the newly signed India-UK Free Trade Agreement (FTA) will ultimately benefit Indian auto component manufacturers according to Sunil Bharti Mittal, Chairman of Bharti Enterprises, who added that the UK component makers will shift manufacturing to India, attracted by lower production costs and a growing domestic market.
In an exclusive interview with ANI, the Bharti Enterprises Chairman also noted that UK automobile companies will increasingly import components from India as the manufacturing of expensive auto components will shift to the country.
He further emphasised that the UK's auto manufacturers would likely increase their imports of components from India, potentially setting up local factories to take advantage of India's low manufacturing costs and abundant talent.
"The Indian auto parts manufacturing industry is one of the most sophisticated and advanced in the world. In fact, if you look at the auto industry, we have a huge leg up in the world of exporting auto components. So I don't think so. Indian industry really needs to feel that expensive components made in the UK or other Western markets will flow into India," Mittal told ANI.
He dismissed concerns that the deal might undermine India's "Make in India" initiative, highlighting the advanced and sophisticated nature of India's auto parts manufacturing industry.
"Quite the contrary with this again, companies that are manufacturing cars and trucks and automobiles in the UK will be importing more components from India, probably setting up industries and factories in India to ensure that they can get low-cost manufacturing of high-quality availability for their own markets and global markets," he remarked.
Under the trade agreement, the import duty on cars built in the UKboth electric and gasoline/dieselwill be reduced from over 100 percent to about 10 percent, subject to a predetermined yearly quota.
With safeguards in place to protect India's local auto sector as its own manufacturing capacity grows, this concession will be brought in gradually over the course of the next ten to fifteen years.
He also pointed out that many UK-based companies are already exporting Indian-made auto components to over 100 countries, underscoring India's global competitiveness in this sector.
"Do keep in mind companies that have gone from the UK to India are exporting from India to 100 other countries. What's the reason? Talent is in short supply in the UK. Talent is very expensive. Manufacturing is very expensive in the UK. The local market is rather modest," Mittal added.
The Automotive Component Manufacturers Association of India (ACMA) has also welcomed the signing of the India-UK Comprehensive Trade Agreement.
The body said that CETA is expected to benefit the Indian auto component sector through enhanced opportunities for exports and streamlined regulatory processes, particularly in key areas such as electric mobility, precision engineering, and lightweight materials.
Indian MSMEs, which form the backbone of our industry, stand to gain from the liberalised terms of trade and improved access to UK markets.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor