The proposed free trade agreement between the European Union and India has auto manufacturers in India worried because that would mean that there would be a drop in duties and cars would become cheap to import, obviating the necessity to have assembly operations into which they have invested. Ratan Tata however believes that with the exception of his own Tata Motors and Mahindra, no other car maker including Maruti and Hyundai develop cars in India or make them specifically for India. He says all the existing operations are only assembly operations that benefit India in no great way. He is therefore for the reduction of import duties. We think this argument of Tata is perhaps not without some logic but it has a downside as well.