UNECE Agreements on Harmonization of Vehicle Standards and India: Empirical Results and Policy Implications

Since the 1950s, under the wings of the United Nations Economic Commission for Europe (UNECE), the process to harmonize technical regulations on vehicles and auto-components in order to facilitate road safety and trade in this category was initiated. The deliberations led to formation of UNECE World Forum for Harmonization of Vehicle Regulations Working Party 29 (WP.29), which presently administers three agreements, namely: UNECE 1958, 1997 and 1998. With growing urge to harmonize with global technical regulations, India joined the UNECE 1998 Agreement with effect from April 2006. Since India’s joining of WP.29, several developed countries, including India’s Regional Trade Agreement (RTA) partners, have asked it to consider joining the 1958 Agreement as well. India has so far refrained from joining the UNECE 1958 standard, given the reservations against certain restrictive provisions of the same. The WITS-SMART simulation results indicate that there could be a degree of divergence in the pure tariff reduction outcomes in Indo-EU sectoral export and imports. In particular, the high technical standards prevailing in key partner countries might significantly impede India’s exports. The analysis concludes that India needs to closely evaluate its options, keeping in mind the growing inclination toward UNECE 1958 even in several RTA partner countries, e.g., ASEAN.