After launch of the Make in India scheme in 2014, Automobile sector in the country is receiving close attention of the policymakers. On one hand, as the country aspires to emerge as a major exporter of various automobile categories (two, three and four-wheelers, including passenger as well as commercial vehicles) and auto-components, the market is protected by tariff barriers . On the other hand, the sector is integrated with the world through India’s Regional Trade Agreement (RTA) deals, in anticipation of increased market access and consequent export opportunities. However, as India’s tariff level is at a relatively higher plane vis-à-vis partner countries, the possibility of rising imports in the aftermath of the trade agreement cannot be ruled out. In addition, the absence of harmonization of technical standards can also impede the market access for Indian exports, even in the aftermath of deep tariff reforms.The global auto-sector standard harmonization is done under the wings of the United Nations Economic Commission for Europe (UNECE) forums. While India has joined the UNECE 1998 agreement with effect from April 2006, difference in the UNECE forum participation pattern among its current and potential RTA partners might put a dampening effect on India’s future exports. The WITS-SMART tariff reform simulation analysis for ten partner countries indicate that India needs to contemplate on the UNECE membership question closely and evaluate its options judiciously to maximize potential benefits.
Automobile sector, India, Trade Bloc, UNECE standards, WITS-SMART Tariff
