'Move to impose duty on pen drive imports may double price'

A proposal to slap anti-dumping duty on Chinese pen drives could lead to more than doubling of data storage device prices and encourage grey market trade, according to a section of domestic industry players.
In its final findings, the Directorate General of Anti- dumping and Allied Duties (DGAD) has recently said USB flash drives (pen drives) have been exported from that country into the Indian market at prices less than their normal values.
The application for the investigation was filed by Storage Media Products Manufacturers & Marketers Welfare Association on behalf of the domestic producers represented by Moser Baer India Ltd.

The recommended anti-dumping duty are up to USD 3.12 per piece. Anti-dumping duty is recommended by the commerce ministry, while the finance ministry imposes it.
Opposing the move, India Electronics and Semiconductor Association (IESA) chairman said: "It is startling to see that a flat rate USD 3.12 & USD 3.06 for imports from China and Taiwan respectively has been proposed. This is an average almost 160 per cent duty over the basic import price of the USBs in 2GB to 8GB capacities. This will put a huge burden on the consumers.
Chandak also said that the main component of pen drives is manufactured in Japan and Korea from where it is imported by even companies in China and Taiwan.

Besides, three leading distributors -- Rashi Peripherals, Supertron Electronics and Compuage Infocom -- who account for over 60 per cent pen drive sales in India have alleged that the move to impose anti-dumping duty will benefit only Moser Baer.

Moser Baer did not respond to queries sent in this regard.
"NAND Flash wafer account for 70 per cent of pen drive cost. Moser Baer itself imports these components so it will not make in India but assembling in India. It has capacity to meet only 9 per cent market requirement and for rest consumers will have to more than double the price of what they pay at present," Supertron Electronics CEO Vishnu Bhandari said.

Instead of imposing duties on imports to protect domestic players from below-cost shipments from China, the distributors said the government should help domestic players compete effectively lowering cost of capital.
Rashi Peripherals Director Suresh Pansari said the government needs to provide support by reducing bank rates, which is over 9 per cent compared to 1-2 per cent offered to manufacturers abroad.
"We would like to join the government in its endeavour of 'Make In India but not by burdening consumers. It needs to improve infrastructure, address finance issues to make manufacturing competitive in India rather than taxing latest technologies from reaching to consumers," Pansari said.

Compuage Infocom Director Atul Mehta said that imposing anti-dumping duty will lead to rise grey market business and government will lose tax revenues.
He claimed that making pen drives expensive will throttle Prime Minister Narendra Modi's dream of Digital India where the poorest person uses information technology to improve governance and access services.