India Eyes Local Value-Add Rules for Auto Parts Exports to EU, UK, and US to Curb China Rerouting

India is considering imposing strict domestic value-addition conditions—50%—on auto component exports to the EU, UK, and US to prevent China from routing its components through India to escape high Western tariffs. The measures come as India signs free trade agreements to boost its $21 billion auto parts export business, while safeguarding interests of local manufacturers. For Britain, the 45% level of local value-addition could be made permanent, and for the US, that of 50%. The move is taken following recent US tariff hikes on auto exports and in an attempt to ensure that only actually Indian-made components benefit from tariff reductions. Top destinations for exports are the US, Germany, Turkey, Britain, and Italy. The government also suggests mutual quota-based concessions in the export of vehicles and goes on to promote local production under the Rs 25,938 crore PLI scheme.

 

Source: Economic Times