Kia, Hyundai cost India billions of dollars in trade deficit: Minister Piyush Goyal

Piyush Goyal, Union commerce and industries minister said that Korean automobile giants Hyundai and Kia cost India billions of dollars in a trade deficit. He was speaking at the valedictory function of the three-day Asia Economic Dialogue. The minister said that Hyundai and Kia have used the free-trade agreement (FTA) to import indiscriminately. What does it mean?

Goyal blamed the nationalist spirit for the trade deficit. He said Korean businesses only buy from the local markets even at a higher cost due to the nationalist sentiment. He said that the same feeling is missing from Indian businesses, which are more profit-oriented.

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Goyal claimed in his speech,

The minister said that he was only trying to show the mirror to the Indian industrialists by taking the example of the Korean auto manufacturers.

India has free trade agreements with Japan and Korea, which means that Hyundai and Kia can import from their home countries without paying any duty. Piyush Goyal also took the example of China for the Indian businessmen and said that to save even 2%, businesses will import from China instead of going local.

Hyundai is a top exporter from India

Interestingly, Hyundai is one of the top exporters of cars from India while many German manufacturers do minuscule to negligible numbers. Hyundai Motor India first exported the Accent and Santro cars out of Chennai Port for Algeria. Since then, the carmaker has added several other export locations around the world.

At present, Hyundai Motor India exports cars to the Asia Pacific region, the Middle East, Africa and Latin America. In 2020, Hyundai Motor India crossed 30 lakh units of exports. In the same year, the brand completed the export of 2 lakh units of Hyundai Creta. Last year, Hyundai India won the EXIM award for Exporter of the year in the Automobile Industry.

Kia India also exports from India but the numbers are not yet significant. In three years, the brand has exported over 1.5 lakh units, which is way below Hyundai India’s number at the moment.

Hyundai Motor India is currently the second largest car manufacturer in India and has been present in the country since 1995.

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