NEW DELHI: Commerce and Industry Minister Piyush Goyal on Wednesday said India lost billions of dollars in export opportunities due to what he called a “naïve” reading of sensitive sectors by the previous government during earlier negotiations with the European Union.
The Free Trade Agreements (FTAs) with the UK and the European Union (EU) have opened up sectors such as automobiles and wines that were earlier perceived as sensitive. Goyal, in an exclusive interview with The New Indian Express, said it was a “naïve” decision by previous governments to keep these sectors closed, which resulted in Indian exporters losing access to large developed markets.
“I think it was the height of naïveté that the Congress could not even see what was sensitive and what was not. Today, India exports $9 billion worth of automobiles, with auto components adding further to that,” Goyal told TNIE.
“Because of that failure under the UPA government, crores of people lost livelihoods. Our ability to move up the value chain and develop higher skills and better quality products was compromised. The Congress, DMK and their partners must be held accountable for this,” Goyal said.
Under the India–EU FTA, tariffs on imported European cars—currently among the highest in the world—will be reduced gradually from 110% to as low as 10% under a quota-based system, while duties on car parts will be completely phased out over five to ten years.
Goyal asserted that despite opening up the automobile and wine sectors, the government has ensured that domestic industry remains largely protected by placing strict import quotas on EU products.
“There is no threat. Manufacturing costs in Europe are too high. We have protected 90% of our domestic auto market. Small cars are not part of the deal, and even in the luxury segment, quotas are in place,” he said.
He added that excessive protectionism under previous governments had come at a significant cost. “Crores of our brothers and sisters were not getting jobs, were not able to become exporters, and were unable to develop their businesses,” Goyal said.
Similarly, duties on wines will be reduced from the current 150% to 75% when the agreement comes into force and will be progressively lowered to as little as 20% over time.
“As for wine, only about 6,000 farmers grow grapes used for wine, and the entire wine industry is worth about Rs 1,000 crore. In contrast, we have secured duty-free access for table grapes to the EU worth about Rs 1,000 crore,” the minister said.