Hyundai, Kia have Cost India Dear in Trade Deficit, says Union minister Piyush Goyal in Pune Meeting

· Other Korea Cos like Samsung in the same Boat?

Commerce and Industries Minister Piyush Goyal on Saturday (25.02.2023) said Korean auto giants Hyundai and Kia had cost India billions of dollars in trade deficit with Korea and other nations, considering the free-trade agreement allowing them to import indiscriminately.

“The Korean auto industry, specifically Hyundai and Kia, are clearly two of the laggards. They have enjoyed the benefits of our free-trade agreement with Korea and Japan and continue to import indiscriminately. So, they have cost us dearly, and I don’t mind saying it publicly,” the minister said, while speaking at the valedictory function of the three-day Asia Economic Dialogue, organized jointly by the Pune International Centre and the ministry of external affairs.

He said talks were on with Korea to open up its markets, but the real challenge was the highly nationalistic spirit of the Korean businesses that buy from the local market even at a higher cost, a feeling which profit-oriented Indian businesses “unfortunately lack”.

“The Korean and Japanese governments don’t stop any steel export from India to Korea. But, we can’t sell even a ton of steel in both these countries due to their highly nationalist spirit. We, unfortunately, don’t have that in India. If we can save 10 paise, we are happy to import from anywhere and anybody. We are happy to import from China, if we can make 2% more profit in our business. It’s very unfortunate and sad,” Goyal said.

He said he was trying to show mirror to the Indian industries and consumers by citing the examples of Korea and Japan. “Korea and Japan will buy steel from their domestic market even if it costs a hundred dollars a ton more but will not allow an Indian firm to become their supplier. No government stops it. And when we talk to the government, they say there’s no barrier from their side. But there is that national spirit that businesses demonstrate to support their own industry. But look at us!” Goyal said.

The minister said the production-linked incentive (PLI) schemes could only help the manufacturing sector to a small extent as ultimately they needed to be ‘competitive, stand on their own legs and provide quality products to the consumers’.

On Ukraine-Russia conflict, he said it had a severe effect on the developed world more than the developing countries. “In the areas of food and energy security, the conflict had a devastating effect across the world. With a consequential impact on inflation, interest rate movement and slowing growth, this conflict has brought us even worse off than we were pre-Covid,” Goyal said.

Taking about the future of India, he said, “Given the young aspirational Indians, we will drive our economy probably closer to a 35-40 trillion-dollar by 2047.”

He, however, added, “Over the years, we have become weaker and started enjoying low-cost poor-quality goods. It is like a drug. By doing all this, we have hurt India’s prospects. We (the government) are fighting it. It will take some time for us to create adequate systems and domestic manufacturing capacity.”