While domestic sensitivities are always kept in view, gains and concessions in a trade deal are evaluated in a complex matrix covering various tracks and weighed in terms of their impact across a wide range of groups and sub groups within these tracks. For EU, automobiles and auto components are extremely important sectors without which it has been made clear by them that support of the Member States for a trade deal would not fall in place. There are many factors which need to be kept in mind as we develop our negotiating position in the auto sector. These include a highly competitive small car manufacturing capability of India as is apparent from the trade statistics, the access to EU market by India’s competitors, the size of India’s domestic market, the current regime of tariffs on CKDs and CBUs, the complementarity of production based in India and EU, the need for expansion of India’s market access into EU etc.
All efforts would be made to get the best possible deal for India. However, it is neither possible to exclude the auto sector from negotiations nor would it be possible to treat a particular sector outside the overall trade matrix. Since the negotiations are ongoing, final positions would emerge in due course of time and would be duly placed before the TERC for ratification.
It may also be mentioned that we are working in close coordination with the Department of Revenue for developing our negotiating positions particularly in the more sensitive sectors.
It may further be mentioned that our offensive interest in a number of sectors including agriculture would play a key role in developing responses that balance market access requests from EU. At this stage, we may restrict our response to the proposed draft reply.