 "Continue with current duty on car imports from EU: Patel")
"We want cars to be manufactured in India so there is industrial progress and employment generation in the country. But we also think that the current tax on imported cars from EU should continue," he told reporters on the sidelines of 4th Clean Energy Ministerial meet here.
Under the Free Trade Agreement (FTA), officially known as Bilateral Trade and Investment Agreement (BTIA), the EU has sought substantial reduction or even elimination of duties on export of its automobiles, particularly the high-end passenger cars, to India.
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The Indian industry, on the other hand, has cautioned against granting any such concession arguing that such an option would hit future investments.
Recently, the Society of Indian Automobile Manufacturers (SIAM) had said custom duties on fully imported cars and engines must not be lowered as was being proposed in the ongoing free trade negotiations between India and EU, stating that such a step would severely damage the sector.
The list of tariff lines, comprising CBUs and engines, should be kept in the Negative List in all FTAs, it said.
Recently, Commerce and Industry Minister Anand Sharma and EU Trade Commissioner Karel De Gucht concluded another round of talks in Brussels. The two sides agreed that a fine balance needs to be arrived at on market access on both the sides, an issue that is bogging down progress in the tortuous negotiations for the pact.
The next ministerial meeting on the ongoing India-EU BTIA is scheduled for June as experts and chief negotiators will remain engaged.
India is in talks with the EU, its biggest trading partner, since June 2007 for liberalising their commerce in goods, services and investment through an FTA.
The two-way trade between India and EU increased to about USD 110 billion in 2011 from USD 83.37 billion in 2010.
On definition of Sports Utility Vehicle (SUVs), Patel said, there is no definition of SUVs worldwide. Tax increase proposal on these cars is a right decision as these cars get subsidised diesel, he said adding that cars costing more than Rs 10 lakh can be charged duties.
Earlier this month, Patel had favoured vehicles priced below Rs 10 lakh being exempted from the 'SUV-tax' announced in this year's Budget.
The Minister said, "Today in rural areas, there are no other means of transport except what we classify as SUVs. Considering the bad infrastructure in rural areas, the cars need to be bigger and steadier."
The Budget 2013-14 proposed to raise the excise duty on SUVs from 27 per cent to 30 per cent, but it will not apply to SUVs registered as taxis.