NEW DELHI: Commerce and Industry Minister Piyush Goyal on Monday said all European carmakers would prefer to manufacture in India, as producing vehicles there would be uncompetitive due to the region's regulations.
India is going to become a global car manufacturing hub, Goyal said.
"Finally India is going to become the global hub for car manufacturing. Everybody is going to come and manufacture in India and with Europe having such crazy regulations, it is going to be impossible to be competitive. All the European manufacturers will come to India," he said at The Dilli Dialogue here.
In free trade agreements, India has provided quota-based tariff concessions to the UK and the European Union (EU).
The pact with the UK was operationalised on July 15, while the deal with the EU is likely to be signed by the end of this year.
"I do not know if you are aware. Tatas had so much trouble after they bought Jaguar. Tata Motors itself was going to collapse and then they put in a lot of re-engineering, and shift some models to India...Finally they were able to make money after years," he added.
Though the minister did not elaborate on any EU regulations, India and certain other countries have raised concerns over EU's carbon border adjustment mechanism (CBAM).
Goyal said international automobile makers would increasingly manufacture in India as market demand reaches a viable scale.
Referring to the quotas permitted for car imports from the UK and the EU, he explained that these largely covered expensive cars, while the lower-priced segment had not been opened.
Citing the examples of luxury automobile makers setting up manufacturing plants in Pune after initially testing the Indian market, the minister highlighted India's potential to attract global automobile companies and strengthen its position.
He also said that increasing demand for electronics and white goods could encourage investment in domestic manufacturing, including semiconductor factories.
The minister highlighted India's demographic advantage, noting that its young population offers opportunities at a time when many economies are experiencing ageing populations.
He said there is a demand for Indian workers in countries such as Germany and Japan.
Regarding India's exports, Goyal said the ministry is targeting USD one trillion worth of exports of goods and services this fiscal.
Both exports and imports are growing, he said. This gives encouragement to domestic industry and international investors.
During April-August this fiscal, exports jumped 17.85 per cent year-on-year to USD 215.91 billion, and imports climbed 18.21 per cent to USD 363 billion.