EU will benefit from India’s growth story in India-EU FTA: Commerce Minister Piyush Goyal

The European Union (EU) will stand to benefit from India’s growth story—and India will stand to benefit from the EU’s size of economy, technology, innovations—once the India-EU free trade agreement has been finalised, Piyush Goyal, the Union Minister of Commerce and Industry, said on Friday.

“As we enter into more and more engagements with the developed world, as we finalise the India-EU free trade agreement which is going to be a comprehensive economic partnership, with strategic elements into this partnership in the months to come, I’m sure India will grow,” Goyal said at the 65th Annual Session of the Automotive Components Manufacturers Association (ACMA) in New Delhi.

“We are looking forward to a very robust, fair, equitable, balanced, mutually beneficial, and win-win partnership, in terms of a robust free trade agreement which will outlive all of us,” Goyal said. The FTA will strengthen the relationship between the European Union and India, and will, in some sense, define two large economies as it grows in the next five years to become an economy of more than $30 trillion.

“We will both economies of importance, of relevance, and contributing to each other to fair trade will truly hope to play a role in your life and businesses, and more towards the shared prosperity of both the regions,” addressed Goyal to the congregation.

Goyal also highlighted that despite currently living in times of uncertainty and volatility, times will only get better. “Maroš (Šefčovič) and I have been working towards the shared prosperity of the EU and India. Every agreement has a certain give and take to make it a balanced agreement. There can never be a perfect situation, and we should never make perfect the enemy of the good. The direction in which we are going, the possibilities that we are trying to unlock are immense,” he said.

He also addressed the assembled members of the automotive components industry, stating that the FTA will be exciting, attractive, and hold good potential for their business. “You will find the FTA an opportunity to grow and collaborate with partners in Europe and the rest of the world, encourage R&D in India, work with partners across the world to help them come to India, and bring down their costs of design and R&D,” he said.

The minister said that with the talent and skill available in India, any company in the world with significance and scale will find it very attractive to work in India and manufacture in India.

Goyal recalled the words of the Prime Minister, Narendra Modi, that the auto industry has been a torchbearer of the ‘Make in India’ programme. “We shall soon be celebrating ten years of the Make in India initiative, and it is an opportune time for us to look at much bigger ambitions and targets,” he said.

In a testament to the ‘Make in India’ programme, Goyal exhorted the auto component industry to build resilience and strategic partnerships, strengthen supply chains domestically and globally, contribute to the much larger scale of the country’s output, create more jobs in the country, and focus on better standards of service. “Produce really modern and beautifully designed and crafted, high-quality components which will ultimately help us create better automobiles and ensure the footprint of India’s growing prowess is left across the world,” he said.

The reduction in GST on auto parts was a long-standing demand of the auto component industry, according to Goyal, with the subject raised to him on multiple occasions. “Whenever the subject was brought to the PM, he listened very intently, especially the spare parts industry, which was suffering from an informal sector, which was not good, whether it was for safety and growth for the industry. It was the PM who directed that the GST on components should be 18%,” he recalled.

Goyal also asked for reassurance that the auto component industry will pass on the complete benefit of GST to all customers. “This will benefit the value chain, the customers, and spare parts will become more affordable, and the government’s intention to increase demand for goods and services will be fulfilled.”

The minister also quipped that he considers the automotive industry his own. “I seem to have adopted you, even though you don’t directly come under my ministry. I know I will always have your support, your confidence in all of us in government, in the strength of this partnership,” he added. Goyal also revealed that the automotive industry has provided him with a great deal of strength during his negotiations in any FTA so far.