Sriram Narayanan on: imports
The price of a BMW in Munich and one in Mumbai might soon be the same. Is that a good thing?
The idea of a truffle should put you off. It’s the fruit of an underground-growing mushroom, which is after all, a fungi. However, the world cherishes it because along with caviar, it’s one of the most expensive edible ingredients. Of course, I did not know that when I was eating it somewhere in Europe some time ago. And I can’t quite remember what the big deal was, but the biggest of chefs all around the world are known to behave like pre-teens after their first kiss when they get their hands on some truffles.
In India, the price of truffles is available on special request. That might change. Because there’s talk that India and the European Union are very close to signing a paper that more or less says, “We, India, shall reduce import duties on all the goodies we import from you, the EU”. So truffles, Lamborghinis, Mercs, Porsches, Maseratis and every out-of-reach European exotic could end up within reach of most wallets.
As I write this, obviously, everybody at TopGear is jumping through the mezzanine. For all of you consumers, this means that bank-breaking SUV or sportscar is now a simple car loan away. And for car companies, it means they can ensure every nut and bolt in the car is of the standard world quality, instead of relying on local suppliers who may think of quality control as some fancy MBA term.
But after being momentarily blinded by the fascinating headlights of a cheaper mid-engine V12, just think. By the time the ink dries on that agreement, is it fair? Is it fair to exempt the Japanese, the Koreans and the Americans from such a deal? Personally, I have more European cars on my list of favourites than anything from the US or Asia. But then, why shouldn’t a Nissan 370Z or a Ford Mustang be yours for under Rs 20 lakh?
You might think high import duties protect local carmakers. What they actually do is generate local employment. By setting up a manufacturing facility, and having local parts suppliers, you do much more good to the country you operate in, instead of merely shipping the car in. Moreover, you won’t have to wait for over a month to get a new side mirror from Stuttgart because you nicked your current one. But then, for all the justifications for manufacturing within India, would you want to?
If you want to open a legal paan shop in India, you’d have to grease palms, hand over suitcases under tables, fill a lot of forms, submit a lot of papers, do a lot of favours, and if the stars align, your shop will manifest itself. Replace that with a car manufacturing facility and the nuisance of greasing, palming, under-the-table deals, forms, papers and favours grows exponentially. So given a system that thrives on complication and corruption, I wonder why the government wants to extend such generosity to Europe?
Ideally, setting up a manufacturing facility should be a corruption- and scam-free affair. But let’s not kid ourselves here. Such a thing is never going to happen in this country. Definitely not in the lifetime of any of you reading this. What could be simpler is to eliminate duties on Completely Knocked Down kits. And by completely knocked down, I mean completely knocked down. Not getting the car in one box, the wipers in another, and calling the process of putting them together your assembly facility. Drastically reducing duties on fully imported cars is like handing over ancestral property to your kids. It makes life too easy for them to be bothered with making any effort.
As a car enthusiast, this agreement – if it ever happens – is everything I have dreamt of. Cheaper imports, better cars, more value for your money and the car of your dreams becoming the car in your parking lot. But in the long run, it’s going to be as useful to us as truffles in gourmet food. Expensive and rare and leaving you with a taste that requires a knack to remember.