'Don’t Rely On Tariffs, Seize New Global Opportunities': Maruti Suzuki Chairman

India must move beyond protectionist trade policies if it aims to sustain long-term growth, Maruti Suzuki Chairman RC Bhargava said, stressing the urgency of advancing trade agreements in the current global environment. Referring to the recent tariff measures introduced by US President Donald Trump, Bhargava warned that India cannot afford to shield itself behind high tariff barriers. The Vikshit Bharat target cannot be met if we have tariff walls,” he remarked.

The chief of India’s largest automaker noted that while the country moves toward a more open trade environment, the government and industry must work together to enhance the global competitiveness of vehicles produced domestically, especially as new opportunities emerge in the international market. “Tariff restricts competition,” Bhargava told The Economic Times.

India currently imposes a 70 per cent import duty on cars valued above $40,000 (inclusive of cost, insurance, and freight), along with an additional 40 per cent agriculture, infrastructure, and development cess.

Import Tariffs On Automobiles

Lowering import tariffs on automobiles has been a consistent demand from global leaders, particularly from the US and Europe. With India now ranking as the world’s third-largest car market, steep tariffs, especially on vehicles and whiskey, remain major sticking points in finalising free trade agreements (FTAs) with the UK and the European Union. 

Maruti Suzuki Chairman highlighted that the ongoing global shift in trade dynamics presents India with a significant opportunity to boost exports, attract investments, and strengthen its manufacturing sector. However, he underscored the need for state governments to accelerate clearance timelines and develop quality infrastructure, such as land, roads, water, electricity, and drainage, to support industrial growth.

"Opportunities are going to arise, but we have to be able to take advantage of those opportunities. There are others too who are looking to take these opportunities, like Cambodia, Vietnam, Indonesia, Thailand. We have to be more competitive to use these opportunities. This can happen if state governments take a lesser amount of time to give clearances and if they provide the infrastructure required to the industry, be it land, power, water, roads, drainage, etc., in time and of good quality,” Bhargava said, as per the report.

Efficient Management Practices

He added that industry leaders must also play their part by upgrading internal processes and adopting more efficient management practices to raise their global competitiveness. Systems, processes, and mindsets need to evolve if we are to compete effectively, he said.

Currently, India accounts for just 3 per cent of the global trade in advanced auto components. The government has called on the domestic industry to significantly ramp up exports and increase its share in the global supply chain. While exports of auto components are projected to triple to $60 billion by 2030, the goal is also to raise vehicle exports to 25 per cent of total production, up from 14 per cent in FY23.

In support of this effort, the central government is offering incentives to manufacturers of electric vehicles and related components under a Rs 25,938 crore production-linked incentive (PLI) scheme, aimed at making Indian-made products more competitive in international markets.

auto