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December 16, 2015 01:00 AM

India cuts tariffs on Chinese molding machines

Plastics News Report
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    KOLKATA, India—India has cut its antidumping duty on Chinese-made injection molding machines to 29 percent, down from 174 percent, a big change in a policy that has been controversial within Indian industry.

    India's Ministry of Finance announced the new tariff levels earlier this month, without commenting on why they were reduced. Sources said it's not clear if the lower tariffs will bring more Chinese machines into India's large injection press market.

    The tariffs were first put in place in 2009, and Indian machinery companies argued they were needed to protect them from unfairly priced Chinese competition. Local molders, on the other hand, wanted duties removed entirely to get better access to technology and make them more competitive globally.

    In interviews at the Indplas 2015 trade show in Kolkata, Indian press makers downplayed the new low import tariff as a non-issue. They argued the industry has moved away from low-end price-sensitive equipment.

    “Indian injection molding presses are good in quality and technology now, and there is absolutely no threat from China press imports after scaling down the import duty,” said NK Balgi, director of Ferromatik Milacron India Pvt. Ltd.

    Balgi suggested duties may have been reduced as part of the Indian government's “Make in India” program.

    “We now have best of technology available with number of global (joint ventures) operating here, moreover, government announced various import incentives as part of ‘Make in India' initiative as per WTO norms to import best of the machinery or equipment on favorable import policies,” he said.

    FMI is the Ahmedabad, India-based subsidiary of U.S. firm Milacron Holdings Corp.

    China's plastics machinery trade association, on the other hand, said it was “totally dissatisfied” with the new 29 percent tariff and said it would result in higher costs for Indian injection molding companies.

    “Their antidumping is only a kind of trade protection, which is also a breach of WTO,” said Borch Zhu, chairman of the China Plastics Machinery Industry Association. “What they are doing is only to protect the India injection press manufacturer.”

    An executive with China's largest press maker, Haitian International Holdings, said that while the company still was studying details, the duties are still too high.

    “Nobody in this competitive environment will be able to afford an approximately 30 percent higher price for imported machines from China,” said Haitian Director Helmar Franz. “So, sorry, for me it looks more like cosmetics.”

    He said Haitian would continue to develop its assembly capabilities in Ahmedabad.

    “(Lowering the tariffs) is a step into the right direction,” he said. “However, in my opinion—any tariff is firstly hurting the production base of molders in India.”

    An executive at Hong Kong-based machine maker Cosmos Machinery Ltd. had guarded praise for the Indian decision.

    “CML welcomes India lowering its tariff, though it's still high in our view,” said CEO Freeman Tang. “Lowering trade barriers will open up the market, as it increases market demand.”

    Another Chinese machinery industry source said a second, ongoing, Indian government investigation against injection molding machines from Taiwan, Vietnam, Malaysia and the Philippines, casts doubt on India's openness. That review is expected to be completed by January.

    “I do not think they have any intention to open their market,” the Chinese executive said.

    Some industry sources noted the underutilization of capacity in India's molding industry, with up to 70 percent of installed capacity underused.

    Sources also noted India's domestic press makers began hiking capacity about three years ago in anticipation of increased demand, but the market remained subdued.

    The head of one Indian trade group that has in the past argued for removing the tariffs, the All India Plastics Manufacturers Association in Mumbai, repeated that the tariffs should be removed because Indian machinery makers have increased their technology levels.

    Lower tariffs will help India's plastics industry, AIPMA said.

    “More machines, more consumption of plastics … (will) generate employment and growth for the industry,” said AIPMA Chairman Arvind Mehta.

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