Indian Government Brings Down CKD Import Duty From 60% to 30%

Indian Government, in this year's budget, proposed to increase the duty on CKD (Completely Knock Down) units to 60% from existing 10%. This change will shoot the prices of cars like Mercedes Benz C Class, Audi A4 and BMW 3 Series by Rs 8 lakhs or more. But earlier today, the proposed hike of 60% on the import duty of CKD units has been brought down to 30% by the Indian Government after affected auto manufacturers showed a stern opposition to the increase.

This is a cause of concern for manufacturers who are importing CKD units as they will still have to increase the cost of their cars by a minimum Rs 4 lakhs, even after the cut in import duty on CKD units. Car makers like Mercedes Benz, Audi and BMW have invested hundreds of crores to set up their facilities in India keeping in mind the current import duty structure.

If the Government plans to change the structure overnight, than it will obviously bring a strong criticism from the affected manufacturers. Even India's largest carmaker, Maruti Suzuki is going to be affected as it depends on Japan for the supply of crucial components. Audi has even suggested that they might leave Indian auto industry altogether.