Though the government has imposed antidumping duty on plastics machinery imports from China, Chinese firms are routing their machines through ASEAN, with which India has signed FTAs attracting very low import duty on machinery from these countries.
To restrict plastic machinery imports from China, Plastics Machinery Manufacturers Association of India (PMMAI) has suggested the government to extend the imposing of antidumping duty on Chinese machinery for another four years.
Injection moulding machine imports below 1000T from China were stopped by imposing antidumping duty since May 2009. However, manufacturers from China are routing the machines through ASEAN. India has signed free trade agreements (FTAs) with South Korea and ASEAN as per which duty on plastic extrusion machines and injection moulding machines attract duty of 5% and zero respectively. This PPMAI believes has put domestic machinery at disadvantage on price. The biggest manufacturer of China has set up plant in Vietnam to find legitimate route to export machinery to India. This is detrimental to Indian manufacturing industry. “Anti dumping duty on imports of machinery from China which expires in 2013, need to be extended for another period of 4 years. Circumventing duty is to be imposed on China machinery getting routed through other countries under the guise of being produced in locations of ASEAN regions,” informed Mahendra Patel, Chairman, PMMAI, and Chairman, Mamata Group. According to PMMAI’s estimate the government can gain revenues of Rs 185 crores by imposing custom duties on machinery import which are under FTAs.
PMMAI, in its pre-budget presentation, wants the Finance Minister to offer incentive for investments in green technology machines like servo driven hydraulics and all electric injection moulding machines. By using high energy efficient plastic processing machines, PMMAI believes, will reduce operating cost of the industry. While this will help Indian industry to be more competitive, government revenue will also go up due to increased industrial growth. At the same time, this will help the industry to protect the environment.
Patel added, “PMMAI has urged the government to include plastics processing machinery in focus product scheme. This will help the Indian industry to become be more competitive and increase exports. It will be beneficial for industry as well as the government as it will lead to increase in country’s Forex reserve, improved balance of payment and employment generation with industrial growth.”
In order to give a boost to exports of Indian plastics machinery, PMMAI has suggested increasing the focus country benefits for exports by adding countries and increasing in benefit per cent. The association has recommended addition of Kenya, Nigeria, Tanzania, Brazil, Russia, Turkey and USA to the focus country list. Addition will increase exports of Indian machinery by making it more competitive.
Advancement in processing machinery for enhancing the energy efficiency and productivity has happened in recent past. Under the compulsions to reduce the carbon footprint processors in the developed world are replacing the older machines with new technology machines. Thus used machinery from developed world is finding a way to developing world with an attractive price tag. “Used, aged machinery population if allowed to increase will render the domestic processing industry inefficient to face global competition in long term. Various industry associations have already suggested measures to be adopted to discourage used machinery imports,” said Patel.
Domestic machinery is produced to the contemporary technologies for improving productivity and energy efficiency, in order to enable processors to compete in the global markets. The most technology components are imported from Europe, the US and Japan. These imports attract 7.5% customs duty. As a result, according to experts, the plastics machinery industry revenue loses are estimated at Rs. 65 crores.
Certain automation equipment is required in the machinery for improving productivity, reducing wastage and improving quality levels. This automation covered under Tariff Heading 9031 is not manufactured in the country and attracts an import duty of 7.5%. “We need duty reduction on imports of all these components to make Indian manufacturers competitive,” added Patel.
Parts of plastics processing machineries falling under HS code 8477 9000 having unit of measure as kg, however most of these parts are procured in numbers. Hence, PMMAI has suggested correction in unit of measure for 8477 9000 from kg to numbers.
(Source Courtsey: Business Standard)