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  Indian car makers have proposed a dramatic cut to the tax rate on imported cars, an unprecedented move that comes as Liz Truss
  scrambles to hammer out a much-anticipated post-Brexit trade agreement with the
  nation. 
  
  It is the first time Indian manufacturers have backed such
  cuts, caving to pressure from a government that wants them to lower entry barriers
  and ease access to one of the world's most protected automotive markets.
  
  
  Current import taxes from 60 per cent to 100 per
  cent in the world's fourth-largest car market rank among the highest globally, drawing criticism from companies such
  as Tesla, which shelved entry plans because of the high tariffs.
  
  
  
  But the Society of Indian Automobile Manufacturers (SIAM) has written to the government backing phased cuts to 30
  per cent over five years, following a grace period of five years with none, three sources said, speaking on condition of anonymity.
  
  
  It was not immediately clear if India had presented the offer
  to Britain in trade talks, but such an offer would come as a
  major boost for Prime Minister Truss, who remains locked in negotiations with India as the deadline to sign a
  free-trade agreement (FTA) looms. 
  
  Former PM Boris Johnson, who met Indian leader Narendra Modi
  in April, set an ambitious target to sign the FTA agreement
  by Diwali and presented the partnership as a key
  cornerstone of the UK's post-Brexit trading plans.
  
  Yet both sides have indicated that work remains to be done,
  even as the deadline fast approaches.
  
  
  
  
  
  
  A major tax cut on foreign car imports could represent a major boost for
  British Prime Minister Liz Truss who is currently
  negotiating a free trade agreement with India (Truss pictured in March 2022 in New Dehli while working as foreign secretary)
  
  
  
  
  
  
  
  Prime Minister Liz Truss is pictured during a visit to Jaguar Land Rover in Solihull as
  part of her leadership campaign on August 23, 2022 in Solihull,
  England
  
  
  
  
  
  
  
  India's push comes in an effort to boost trade ties globally, that saw deals recently signed with Australia and
  the United Arab Emirates among other nations (Indian Prime Minister
  Narenda Modi is pictured)
  
  
  
  
  
  
  
  Truss is continuing talks started by former PM Boris Johnson (left), who
  in April of this year met Modi and set an ambitious target to sign an FTA agreement by Diwali
  
  
  For years, Indian car makers have resisted tax cuts
  so as to protect their turf, while arguing that such
  a move would dry up investment in domestic manufacturing by making imports
  cheaper and easier for global automakers.
  
  While Britain has few car factories run by the likes of Nissan, BMW
  and Tata's Jaguar Land Rover, companies fear the move could set a precedent in negotiating
  deals with others like the European Union (EU), Japan or South Korea, the sources said.
  
  
  The shift in stance comes weeks after commerce minister
  Piyush Goyal firmly told senior executives of companies such as Maruti
  Suzuki, Tata Motors and Mahindra that India needed to make some kind of offer
  to Britain on autos.
  
  'The message from Goyal was clear - if companies don't come up
  with a proposal on lowering taxes, the government will do it for them,' said one person who
  attended an August meeting between the minister
  and company executives. 
  
  
  
  
  
  
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  India's push comes in an effort to boost trade ties globally, that saw deals recently signed with Australia and the United Arab Emirates, so as to attract investment from
  companies seeking to diversify beyond China.
  
  
  
  Britain is in the offing to become a major trade partner
  with India, and a major tax cut to imported cars will likely be well received by negotiators in the course of hashing out a hotly-anticipated FTA.
  
  
  But UK government spokesperson said earlier today that Britain said it will only sign a trade deal with India when there is one that 'meets the
  UK's interests,' in response to comments from Delhi that
  talks needed to be a win-win for both sides.
  
  
  'We remain clear that we won't sacrifice quality for speed and will only sign when we have a deal
  that meets the UK's interests,' a spokesperson said. 
  
  Meanwhile, one Indian government source said the plan to cut tax rates to 30 per cent over 10
  years 'is not enough'.
  
  One of the sources said: 'One view is to ease access for luxury cars sooner
  than other categories.
  
  The industry has no issues opening it up and lowering rates earlier.'
  
  
  
  
  
  
  Embattled PM Liz Truss is aiming to complete a free trade agreement
  with India before the end of October as part of a post-Brexit trade plan
  
  
  
  
  
  
  
  Employees work on a Jaguar XJ automobile in the body shop on the production line at Tata Motors Ltd.'s Jaguar assembly plant in Castle Bromwich, UK.
  
  
  Indian car makers have for years protected their domination of the
  fourth-largest automotive market in the world, pushing to
  maintain sky-high tax rates on foreign imports
  
  
  
  
  
  
  
  SIAM, which groups car makers including India's top-seller Maruti
  Suzuki (Suzuki car pictured) is believed to have written to India's government proposing
  a dramatic cut on tax rates for foreign vehicles
  
  
  High tax on imported cars was one of the major dealbreakers in previous EU trade talks that ended in 2013, with Indian marques concerned that European manufacturers would swoop
  in and devastate their market share.
  
  A few EU nations, particularly Germany and France, are home
  to huge car firms such as Volkswagen AG, Mercedes-Benz and
  Renault that count India as a major growth market, and pose
  a far greater threat than British manufacturers to Indian automotive companies.  
  
  Some companies also worry that with large investments going into
  clean mobility, easy import of electric vehicles runs the risk of hurting local players, they
  added.
  
  'Everyone is acting on a lot of apprehension and few
  data points on what impact a duty cut can have,' one of the
  sources said.
  
  SIAM, which groups car makers from India's top-seller Maruti Suzuki, to major
  companies such as Tata Motors and Mahindra & Mahindra, did not immediately respond to a request for comment by Reuters.
  
  
  The commerce ministry, which is leading the trade talks, also did not
  respond.
  
  
  
  
  
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