India should keep the labour intensive sector out of the purview of the free trade agreements particularly the proposed pact with the 28-nation European Union bloc.

"FTAs with competing countries do not benefit Indian automobile industry, it is against the concept of 'Make in India' for local value addition and local employment and as such completely built units (CBUs) of vehicles and engines should be kept in India's negative list under India-EU FTA," Society of Indian Automobile Manufacturers (SIAM) said.

Sectors under the negative list of any free trade pact are protected from any kind of duty reduction.

The proposed bilateral trade and investment agreement, also known as FTA (free trade agreement), between India and EU, started way back in 2007 but has not yet been concluded
due to major differences on sectors including automobiles.

"The negative fallout will seriously compromise the interests of our investment, manufacturing, value added and employment at no obvious gain in trade or economic expansion. For automobile industry, India-EU FTA will be counter to our Make in India initiative," SIAM cited in a white paper.

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