Sri Lanka auto import tariff hike: India mulls diplomatic effort

India may initiate diplomatic efforts to urge the government of Sri Lanka to cut import tariff on automobiles as the hike in duties had affected India's exports.

"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," additional secretary in the commerce ministry Rajeev Kher told reporters on the sidelines of a FICCI function.

His remarks came in response to a query on options the government had, to deal with the matter after Sri Lanka increased import tariff on automobiles, thereby hurting exports from India, according to PTI.

"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 said.

In a recent move, the neighbouring country had hiked import duties on vehicles by almost 100 per cent, which had adversely impacted exports from India, according to Society of Indian Automobile Manufacturers (SIAM) director general Vishnu Mathur.

He 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. He added, now this had almost gone.

The duty hike had earlier affected small cars, two wheelers and three-wheeler exports from India.

Only two weeks earlier, the authorities had increased duties on sports utility vehicles as well, he added.
According to Mathur, SIAM had planned to host an auto expo in the country but had postponed it keeping the situation in mind.