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India mulls diplomatic effort to ask Sri Lanka reduce import duty on automobiles

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India is mulling diplomatic efforts to ask the Sri Lankan government to bring down import duty on automobiles shipped out of India. Sri Lanka had increased tariffs on imported vehicles earlier this year which has sharply affected export of vehicles from India to the island nation.

"There are many options, one option is to approach purely diplomatically, and request the Sri Lankan government because it is a win-win situation if they cut down the tariff," said Rajeev Kher, additional secretary, Ministry of Commerce on the sidelines of a FICCI conference.

 

 

"Sri Lanka is a very important market as far as cars and commercial (vehicles) are concerned. Obviously, we are concerned about it. We believe that the very substantial rise in import tariff in Sri Lanka is going to adversely affect our car exports to that country," Kher added.

Recently, the neighbouring country has increased import duties on vehicles by almost 100%, which has adversely impacted exports from India.

Vishnu Mathur, director general, Society of Indian Automobile Manufacturers (SIAM) said, "Last year India had exported vehicles worth $ 6 billion out of which automobiles worth $ 800 million had been sold in the Sri Lankan market. Now this has almost gone.” Earlier the increase in duties affected small cars, two wheelers and three-wheelers exports from India. Just two weeks before, they had increased duties on sports utility vehicles as well, he added.

Mathur further said SIAM had planned to host an auto expo in the country but "we have postponed it keeping the situation in mind".