Auto Service World
News   January 9, 2012   by CARS Magazine

Canada looking to enter Indian auto parts market

Fourth round of a Comprehensive Economic Partnership Agreement expected to lead to an agreement by 2013, high commissioner to India says.


Canada’s high commissioner to India Stewart G Beck says a Comprehensive Economic Partnership Agreement (CEPA) now being negotiated between the two governments, could pave the way for Canadian firms to play a larger role in the Indian auto parts industry.

“We are looking at tariff reductions across sectors but the focus is to get maximum access to the Indian auto component industry where tariffs continue to be high,” Beck told an Indian financial magazine.

“India, on its part, is looking at services sector as well as labour mobility to Canada under this agreement, which will be mutually beneficial to both the countries as we compliment each other,” he said.

According to Beck, the fourth round of negotiations between the two countries will be held in February in New Delhi and the agreement is likely to be concluded by 2013. The effective import duty on auto components in India, as of now, stands at 7.5 per cent and Canada, which has free trade of components within North American continent, finds it “very high” by all standards.

The auto component industry in India has been seen as a lucrative business proposition largely because India’s car market still has relatively low penetration and the demand for automobiles is expected to go triple by 2020 from three million vehicles now to nine million vehicles.

India and Canada started talks on CEPA after the Indian Prime Minister Manmohan Singh met his with Canadian Prime Minister Stephen Harper in the G20 summit in South Korea in 2010.

The preliminary joint feasibility study had pointed that an agreement could increase economic output in each country by approximately $6 billion a year and increase two-way trade by 50 per cent. The current bilateral trade between India and Canada stood at $4.5 billion in 2010 and this is expected to go up three fold to $15 billion by 2015.


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