Imtma Gears Up To Combat Mnc Competition

The Indian Machine Tool Manufacturers Association (IMTMA), which is saddled with cheap machine tool imports in the wake of a lowering of import duties and the currency devaluation in South-East Asia, is gearing up to fight back foreign competition.

We are not seeking protection from the governments, but asking it to provide a level playing field, which could be done by, among other things, giving parity to import duty on CNC machines and components, said Gautam Doshi, president of the IMTMA.

Currently, only 25 per cent import duty has to be paid for imported machine tools. On the other hand, machine tool components are at a hefty 60 per cent disadvantage as they are fully dependent on the import of CNC components that are used in the manufacture of machine tools. A higher price on imported CNC components results in higher finished machine tool costs that outprice foreign imports. Besides, the domestic industry also faces the problem of virtual dumping of second hand machine imports in the country.

 

In view of these problems, the IMTMA intends to lobby with the new government that is to be sworn in after the forthcoming elections, to reduce the import duties on CNC components to 25 per cent, the same as capital goods import duty.

Under the name of rationalisation of excise duty, the Indian machine tool industry had to face higher excise duty from 10 per cent to 15 per cent imposed in the last budget by finance minister P Chidambaram, Doshi said, elaborating on another disadvantage that domestic industry has to face to combat growing foreign competition.

In the domestic market too, machine tool manufacturers are facing the prospect of lower sales as the slowdown in the automobile sector has badly hit component manufacturers, who have, in turn, been affected by a slack in demand for machine tools.

IMTMA is devising strategies to counter MNC threat by focusing on research and development of low cost hi-tech machines. It has now decided to undertake collective R&D as part of an indigenous drive. In this respect, the machine tools division of Premier Automobiles, which produces cooper CNC versions and other machines, is upgrading its technology through its own R&D and reverse engineering purchase of technical know-how.

To overcome the threat of imports, we are concentrating on niche markets for machine tools where volumes required are low and, therefore, not attractive to producers of high volume and low cost, said Shreekant Joshi, vice-president of PALs machine tool division. The company is also focusing on special purpose machines that require a high degree of close interaction.

Electronica Ltd, a leading Pune-based CNC machine manufacturer, has also worked out a strategy to keep foreign competition at bay. We are offering quick services through a well spread out network of service centres at 16 strategic locations across the country, besides offering training programmes, said K G Advani of Electronica.