?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. 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,? Beck told Financial Chronicle.
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.
Of late, auto component industry in India has emerged as a lucrative business proposition for players across the globe primarily for two reasons. Firstly, India being the highly low-penetrated market for cars, the demand for automobiles is likely to go up by three fold by 2020 from three million vehicles now to nine million vehicles. Secondly, all global auto majors are now setting up bases here and if the duty on auto components is slashed it will help component manufacturers in Canada, who are facing severe dip in demand back home.
?Indian companies are making inroads into Canada in the services sector but there is tremendous scope for auto components that fall in the small and medium enterprises' category. Hence we are now focusing on the SME sector like hospitality, media and food processing to enhance bilateral trade between the two countries," says Satish Thakkar, president of the Indo-Canada Chamber of Commerce.
India and Canada started talks on Cepa after prime minister Manmohan Singh met his Canadian counterpart 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.
Of late, India has become aggressive on bilateral agreements encompassing goods, services and investments between the two nations. India already has bilateral agreements with Singapore, South Korea, ASEAN, Japan and Malaysia while negotiations are on with EU, Canada, Australia and New Zealand.
Source: http://c.moreover.com/click/here.pl?r5719153158
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