Successive finance ministers have talked about bringing import tariffs down to East Asian levels. Sooner or later, QRs will be replaced by tariffs. On current reckoning, the highest import duty will be 30 per cent; and this peak rate will decline in the not too distant future.

The demand for new imported cars will at best be marginal; only the very affluent will go for pricey brands. The Indian market, by and large, is confined to small-medium, fuel-efficient and relatively low-cost cars. Domestic car producers, including the new ones, have oriented their costing and specifications to Indian requirements. Cars produced in countries far more affluent than India will find it difficult to export to this country.

Besides, in buying new cars, the Indian-user looks for widespread servicing facilities and easy availability of spares at competitive prices. This last will be difficult for imported cars (both new and used) to establish; the domestic producer will be jumps ahead (as has been proved by Maruti-Suzuki). Thus, import protection need not be high. To ward off imports, Indian cars must be export-competitive in quality and price and build a powerful brand image abroad. Only then will they be able to give imported cars a run for their money.

As regards second hand cars, policy must accord priority to domestic car manufacture because it generates employment. The technical specifications, including pollution, safety and fuel efficiency requirements, of cars made in India must be world class. Imported second hand cars must be made to pass muster on these counts. Finally, Indian cars must become worthwhile buys in the falling used car market. They must be durable like Ambassador and Premier in the days gone by. That will hold used-car imports at bay.