Companies such as Greaves Cotton, Shrachi group firm BTL EPC, KisanKraft and Kubota Agriculture Machinery have urged the government to reconsider its decision to restrict import of power tillers and its components, saying the move will compel many firms to down shutters.
These companies have been importing and assembling power tillers for decades and have built their reputation for supplying quality tillers across the country along with service infrastructure including trained technicians at farmer doorstep, industry body Power Tiller Association of India (PTAI) said in a letter to the commerce and industry ministry and Director General of Foreign Trade. ET has seen a copy of the letter.
DGFT had last week issued a notification to put some items, including power tiller/rotary tiller and its component, under “restrictive imports”.
Putting a product under a 'restricted' category means the importer would have to seek a license from the DGFT for the imports. In a public notice, DGFT has said that the cumulative value of authorisation issued to any firm/all firms in a year would not exceed 10% of the value of power tillers imported during the past year (2019-20) by that company. The cap of 10 % would also be applicable for components of power tillers.
Restricting import of components such as engine, transmission and chassis will stifle the business because only a few top Indian power tiller makers—such as VST Tillers & Tractors and Kerala Agriculture Machinery Corporation (Kamco)—manufacture them at their units, PTAI president Ravi Todi said. The rest of the industry depend on components from other countries.
He said companies are open to the idea of time-bound import substitution of tillers in a phased manner.
Though the association supports 'Atmanirbhar Bharat’ vision of Prime Minister Narendra Modi, "we are seeking guidance from the government to help us indigenous power tiller through the 'Make in India' initiative as setting up of a full-fledged manufacturing unit on Indian soil would take anything between two-to-three years””, Todi told ET.
Shailendra Kumar Singh, general secretary of PTAI and senior general manager at Greaves Cotton, said, “If we start manufacturing these components at our facilities, the products may not be efficient technologically compared to imported ones. Over the years, we may be able to develop the expertise to produce quality stuff, but definitely not immediately.”
Indian companies sell about 50,000 power tillers a year in the country. In comparison, much smaller country Myanmar sells approximately 350,000 units a year, while Bangladesh sells about 45,000 units and Nepal, 10,000 units.
VST Tillers and Kamco, which make power tillers in the country, together account for 70-80% of the local demand, selling 30,000-40,000 units, varying from year to year.
The balance around 10,000-15,000 units are imported and assembled—the cumulative value of which is Rs 100-120 crore, industry insiders said.
In its letter to the ministry, the association also pointed out that sales and service network of companies dealing with imported and assembled power tillers is run by small and micro units, supporting livelihoods of thousands of people directly and indirectly.
Hence, the move to restrict imports will create significant unemployment and further aggravate the situation in the country already battered by the Covid-19 pandemic, the association said.
Source :- Economictimes.indiatimes.com