Hyundai, Kia cost India billions of dollars in trade deficit: Piyush Goyal

Korean auto majors Hyundai and Kia have cost India billions of dollars in trade deficit, Piyush Goyal, the minister of commerce said in a statement. He was speaking at the valedictory function of the three-day Asia Economic Dialogue on Saturday. 

"The auto industry is certainly one industry, where we should be clearly 100% indigenized. Some companies claim to be indigenized but I suspect it is not truly so, because of the import element. Korean auto industry Hyundai and Kia are clearly two of the laggards. They’ve enjoyed the benefits of our free trade agreement with Korea and Japan and continued to import indiscriminately. The small investment of half a billion or a billion dollars, has cost India very dear in terms of billions of dollars of trade deficit. They have caused dearly with Korea and with other countries," said Goyal while speaking on the free trade agreement between India and other countries. 

"The way forward in my mind is that we are talking with Korea to open their markets for India as well," he added.

He said that Korea and Japan don’t stop the export of steel from India, but India can not sell a ton of steel in both countries because there is a “nationalist” spirit.” "We, unfortunately, don’t have that in India. If we can save 10 paise, we are happy to import from anywhere and anybody. We are happy to import from China if we can make 2% more profit in our business. It’s a very unfortunate and sad reality that I am showing to our industry and our consumers, and it is high time that it changes," Goyal said.

Citing some examples, the minister of commerce said that Korea and Japan will buy steel from their domestic company at hundred dollars a ton more but will not allow an Indian company to become their supplier. "No government stops it, and when we talk to the government they say we have no barriers from our side. But there is that nationalist spirit that business is there to support their own industry," he said. 

He said that though the government has imposed tariff barriers, imposed quality control orders, and introduced the Production Linked Incentive (PLI) scheme, the Indian auto industry would need to improve domestic manufacturing capabilities, and quality of goods, and meet the consumers' demand for a competitive basis. "Ultimately Indian manufacturing will have to be competitive and will have to stand on its own legs. We’ll have to provide quality products to the consumers and our consumers need to be more careful with the potential that we are losing because of indiscriminate imports even of goods that can be well made in India," Goyal said. 

The minister shared that India would be the third largest economy in four years or so, at best five years. "My own conviction about the way India is growing is that we will drive our economy probably closer to 35 - 40 trillion-dollar economy by 2047. The desire of every Indian is to be second to none," he said. 

Last week, Anil Agarwal-led Vedanta Group and Foxconn, the Taiwan-based electronics manufacturing giant, selected Dholera Special Investment Region (SIR) in Gujarat for setting up India’s first semiconductor manufacturing facility at the cost of ₹1.54 lakh crore. The facility is touted to generate around one lakh direct jobs and will reduce electronics imports from the country.