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To: James C. Bennett

The consequences of no FTA with India are just what besides this?

It’s crazy to be waltzing around with China while leaving our dot-Indian friends in the lurch.


2 posted on 07/23/2012 10:30:48 PM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: HiTech RedNeck

I suspect part of the consequences is that India can continue to impose stratospherically-high customs duties on imports (automobiles are charged at 111%, and motorcycles are 104%). With a FTA in place, they’d probably be required to drop those duties significantly, as part of opening the Indian market to US imports.

Since domestically-produced vehicles are pretty shoddy compared to vehicles from more developed nations, dropping the import duties (which would have the effect of dropping those vehicles’ prices to nearer their Indian counterparts) would essentially push the Indian manufacturers into crisis as no one would buy their product anymore. They’d be facing huge revenue drops from loss of sales, at the same time that they faced steep investment costs to bring their product quality up to international standards.

They would also probably have to retool many production lines to produce more modern designs: The Hindustan Motors Ambassador is essentially a 1950s Austin, still in production (though admittedly, it’s much-loved and has a market all its own). More “modern” cars in India still have many areas for improvement in reliability, materials, and features. Most Indian-market motorcycles still use drum brakes front and rear, and have old-style twin rear shock absorbers.


4 posted on 07/24/2012 12:30:42 AM PDT by Little Pig (Vi Veri Veniversum Vivus Vici.)
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