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FM's signal not positive: Ford

Written by: Staff

Chennai, Mar 1: Car major Ford India today said the decision to reduce duty on small cars would not send a positive signal for global manufacturers and would ultimately ''weaken'' India's position.

Reacting to the duty reduction announcement made in the Union Budget yesterday, Ford India Managing Director Arvind Mathew said in a release here that the policy decision would curb the overall industry growth and foreign investment in the long term. This would only be detrimental to building a globally competitive India.

Though at a first glance it looked like a win for the Indian consumers and the auto industry, on analysis, it was found that the duty reduction on small cars would ultimately ''weaken'' India's position, he added.

''It does not send a positive signal to global auto manufacturers, like Ford who have invested in India and created jobs.'' Noting that this measure had a ''serious distortionary'' impact on the Indian auto market, Mr Mathew said he was looking forward to a level playing field. ''Global manufacturers need the same incentives if they are to participate more actively in growing the automotive industry in India.'' Confused over the government's reasoning that the reduction was in line with the country's strategy to become an export hub for small and fuel efficient cars, he said currently India was not exporting these cars and had few free trade agreement opportunities to increase exports.

To spur foreign direct investments and economic growth, India needed ''global cars'' right now and not ''India cars.'' ''This will raise the level of competition in India and drive automobile manufacturers to improve their position faster, making them more globally competitive,' he said.


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