| Jaitley: Here’s the cushion
New Delhi, Oct. 20: Arun Jaitley, Union minister of industry and commerce, today assured domestic car makers that their fears about the new free trade agreement with Thailand will be addressed at the next round of talks.
Domestic car makers are spooked by the FTA believing that it will incentivise new entrants to set up assembly operations in the country to the detriment of those who set up manufacturing facilities in the country.
“It will only serve the interests of companies like Toyota and Honda,” Hyundai Motor India president B. V. R. Subbu said in a recent interview.
“All issues are being taken care of but the objective of the FTA is to give a fillip to trade. By year 2011, when the agreement comes into effect, the auto parts sector would have grown further,” said Jaitley on the sidelines of the ninth joint meeting on the Indo-Romanian commission organised by Ficci here.
Many multinational automakers have set up shop in India and they largely source auto parts from the domestic component makers. The Indian auto ancillary industry has progressed so well that there was no need to fear, he added.
Jaitley admitted that the rupee's steady appreciation had put pressure on exports, but felt it was not a matter of great concern as long as growth of exports stayed ahead of the GDP growth rate.
Cumulative exports in the first five months was put at $ 22.5 billion against $ 20.6 billion. In rupee terms, exports grew by only 4.1 per cent during the period April-August. The month of August recorded a negative 1.5 per cent growth over the corresponding period in the previous year. The minister said 71 investment proposals were being considered by Beijing.
Brazil, India in post-Cancun talks
Brazilian foreign minister Celso Amorim and Jaitley met here today to take stock of the post-Cancun scenario and find ways to get the world trade talks back on the rails again. Both the ministers are reported to have underlined the need for multilateral trade negotiations to resume at an early date in Geneva so that the process could move forward.
The two ministers also discussed bilateral trade issues including the two-way flow of foreign direct investment.