Interview: “End result has to be zero”: CLEPA CEO Lars Holmqvist on India tariffs

Automotive supplier body CLEPA CEO Lars Holmqvist has just returned from attending the recent European Union-India trade summit in New Delhi, where the contentious issue of tariffs formed the backbone of lengthy discussions. The CLEPA chief outlined his thoughts on the high-level mission to Simon Warburton.

j-a: What level of senior delegates were present at the recent Free Trade Agreement talks in New Delhi?

LH: “There was the Indian Minister for Trade and Commerce and the EU Commissioner for Trade, Karel De Gucht, as well as 10-15 Indian industrialists. We are pleased with the success of the outcome is not very easy to negotiate.”

j-a: To what extent were trade tarrifs the main topic of discussion?

LH: “There were a lot of topics, ownership rules, but we of course, have some specific topics. One of them is imports from the EU to India of components and especially some high-tech components.

“The Indians are very reluctant to take away import tariffs – they do not have import tariffs to pay when they import into Europe. It is a bit of a strange position.”

j-a: How slowly – or quickly – are talks progressing on EU-India tariffs?

“We won’t have total success we have to pay zero and they pay zero, but if we have a bit of patience and allow them a bit of transition, then we are going in the right direction. We have to make concessions, but there are areas where they have to reduce tariffs over five to six years. But the end result has to be zero.

“I think we are coming closer to an agreement. There is a meeting in June in Brussels and after that…some kind of agreement should be in place by this autumn…that can take effect in 2014.”

j-a: How has it come about India enjoys such a preferential tariff environment?

LH: “India has been enjoying the status of a developing country and they are often given this kind of free market. Now they are not developing, they are developed.”

j-a: What if there is a hiccup in these remarkably complex talks, when can the tariff subject be brought up again?

LH: “According to the people we have talked with for a long time from the EU, if it does not happen now, this year, then it will not happen at all. It is pretty much political pressure on both sides to get an agreement. Even if you agree a memorandum of understanding, the actual period of decision making is around one year.”

j-a: To what extent are CLEPA members involved in India, why do you view it as such a vital market?

LH: “We have a lot of companies that are now many years established in India, such as GKN or Bosch. Bosch employs 26,000 people in India, so it is of great impact. It is amazing but absolutely true – and they are growing. One thing you can say without blinking is India will be one of the major players in the future – for the long term – in 15-20 years.

“It is absolutely essential we have a level playing field, otherwise we will be disadvantaged compared to our competitors, compared to other parts of the world.”


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