Govt withdraws export obligation for auto makers

NEW DELHI: The government on Wednesday withdrew the export obligation on auto companies against imports of auto kits. India is committed to such reofrm according to its undertaking to the WTO. The domestic auto company that stand to gain the most is Hyundai Motors India Ltd. This, along with Daewoo Motors India Ltd, have the largest export obligations as well as the largest shortfall from the export target. While other manufacturers also gain, the impact is much less. Ford has been well on course to meeting its target and General Motors India Ltd has a low target to meet. A notification issued by the Directorate General of Foreign Trade (DGFT) said that the joint venture auto companies which had signed memorandum of understanding would no longer have to fulfil this export obligation against imports of Completely Knocked Down and Semi-Knocked Down kits or components. This follows India’s commitment to the WTO that it would issue necessary notifications in this regard before September this year. India had on March 2002 withdrawn its appeal against the WTO ruling on its Auto Policy which stated that New Delhi had acted inconsistently with its obligations by imposing conditionalities on auto makers under the MoU. The ruling was in response to complaints by the US and EU to certain aspects of India’s automotive components licensing policy.