AIFMP to make a representation about the proposed ban on import of secondhand goods

As per a news article published in The Economic Times on 14 June 2012, the government of India is proposing to impose a ban on import of secondhand capital goods to enhance the overall productivity and competitiveness of the Indian manufacturing sector.

A panel headed by cabinet secretary AK Seth has decided to ban import of machinery more than five years old. “The big worry is that such imports would impact overall productivity and erode competitiveness of the manufacturing sector,” said a government official privy to the development. The domestic capital goods industry says imports are partly responsible for the drop in output; a contention supported by

Government data that showed production of capital goods contracted 4.1% in 2011-12.

As per the news item in The Economic Times, the Cabinet Secretary led panel has recommended that import of plant and machinery more than five years old should be banned.

When PrintWeek India spoke to Ranjan Kuthari, the president of the All India Federation of the Master Printers, he said: "This is definitely a great concern for the Indian print industry."

Kuthari added, "As you are aware, with the fast advancement of print technology, many a times we the printers import secondhand machinery to meet the demand and await the arrival of new technology. With the new technologies coming in, trend is to invest on newer technology rather than buy new equipment of existing technology.

Hence requirement of secondhand machinery with lower investment is always required in print industry to maintain the continuity. Investment on existing technology of new equipment hence becomes restricted."

The commerce and industry ministry, which in April withdrew a facility that allowed domestic firms companies to issue equity to overseas firms against import of secondhand goods, is now expected to ban such imports under subsidy schemes such as the Credit-Linked Capital Subsidy Scheme. The ministry has been asked to either ban import of machinery more than five years old or spell out the age limit for machinery in each sector.

The usage of secondhand machinery is high in certain sectors like the print industry; where the ration of imported new kit versus old kit is 90% to 10%.

Addressing these concerns, industry chamber CII had written to the government earlier saying that secondhand machinery stifled domestic growth and led to unemployment. The CII said such imports retard technological upgradation, increase energy consumption and also pose a threat to safety seeking imposition of restrictions.

This News article appeared in the 13 July 2012, Vol V Issue 3 issue of PrintWeek India Magazine