1. TEI PERSPECTIVE RATIONALIZATION OF 2 ND HAND MACHINE IMPORT IN CAPITAL GOODS INDUSTRY Mr. J. Anand Vice Chairman, Textile Machinery Manufacturers’ Association (INDIA) DHI and Capital Goods Industry Meeting 30 th September, 2014, Udyog Bhavan, New Delhi

2. 2 OVERVIEW of DOMESTIC PRODUCTION & IMPORT - WEAVING  Import of secondhand shuttleless looms started in a big way after the liberalization of trade and industrial policy of the Government.  Since year 2000, only 1,50,000 shuttleless looms installed till date.  It took more than 20 years for textile industry to do so.  Whereas China has installed 7,50,000 shuttleless looms within the last 10 years.  The revised policy of the Government has reduced the import of secondhand shuttleless looms in the country  Imposition of higher duty for secondhand machines  Reduction of subsidy under TUFS-30% CLCS for the second hand machines  Off late import of secondhand shuttleless looms have dropped to 22% during 2013-14 from the level of 82% during 2011-12.  Indian manufacturers successfully developed and installed low-cost basic technology shuttleless rapier looms in the country.

3. 3 TEI IMPORT DATA INCLUDING USED MACHINES HS CODE 2008-092009-102010-112011-122012-13 TotalUsedTotalUsedTotalUsedTotalUsedTotalUsed 8444 208.695.15239.035.55112.472.37116.673.65635.9413.53 8445 1857.16193.391272.57284.871914.69187.782923.61161.182602.97135.12 8446 803.52290.931068.52418.631510.19597.531694.90565.751937.01410.59 8447 127.8432.4896.91237.0284.17366.7754.44258112.18 8449 23.210.9218.033.677.771.84178.159.95195.9513.27 8451 1050.2538.85782.5364.74909.5260.78927.8751.56872.1445.98 Total 5343.04657.045342.94874.36326.36934.476882.46846.537500.83730.67 * 8446 – Weaving Machines

4. 4 IMPORT OF SHUTTLE LESS LOOMS Loom Import2008-092009-102010-112011-122012-13 No. Value No. Value No. Value No. Value No. Value (Rs. Cr) New Rapier1138110.971607164.3615411.9219225.544829476.82 New Air Jet507127.46692225.121765404.1522654.862790774.7 New Water Jet -- 113067.031991147.82 New Projectile -- 175.58 Total (1)1645238.432299389.481919416.051575347.4396271404.92 Used Rapier 54838.632644164.443719249.073637290.782352227.99 Used Air Jet 15312.08900324.66106257.921311104.5848441.48 Used Water Jet 2466.63147496.37149749.3844717.251416.77 Used Projectile 40732.712060307.06216115.651624144.971428115.25 Total (2) 135490.057078892.538439372.027019557.584405391.49 Grand Total (1+2) 2999328.4893771282.0110358788.078594905.01140321796.41 Used Loom %45%75%81%82%31% *(Source: Private)

5. 5 CAPACITY OF SHUTTLELESS LOOMS (Existing Manufacturers) Name of the ManufacturerCapacity per annum (Nos.) Alidhra Weavetech Pvt. Ltd., Surat3,000 Dynamic Autoloom India Pvt. Ltd., Ahmedabad1,000 Friends Engineering Works, Panipat100 Honest Trading Co. Pvt. Ltd., Bilimora1,000 Laxmi Textile Stores, Ahmedabad2,500 Lifebond Machines Pvt. Ltd., Surat2,500 Palod Himson Machines Pvt. Ltd., Surat2,000 Aalidhra Texpro Engineers, Surat2,000 P.T. Dynamic Textile Machinery Pvt. Ltd., Ahmedabad (in collaboration with Panter) 500 TOTAL13,600

6. 6 CAPACITY OF SHUTTLELESS LOOMS (New Manufacturers) Name of the ManufacturerCapacity per annum (Nos.) Shivangi Industries Pvt. Ltd., Bharuch500 Anil Metal Industries Pvt. Ltd., Ahmedabad1,000 Surya Engineering Mfg. Pvt. Ltd., Mumbai500 Premier Looms Manufacturers Pvt. Ltd., Surat500 M/s Vari Textile Machinery, Komarapalayam500 TOTAL3,000 GRAND TOTAL (EXISTING + NEW MFG.)16,600

7. 7 INDEGENOUS SHUTTLELESS LOOMS TYPESPEED (rpm)Remarks RAPIER 180 to 275 rpm Already installed - over 8000 nos 350 rpm Unable to compete with imported new & secondhand shuttleless looms 400 rpm 600 rpm AIRJET800 rpm WATER JET 800- rpm

8. 8 IMPORT – MATTER OF CONCERN  Dual Subsidy on Imported Looms - Firstly, an export subsidy by the Chinese Government and Secondly TUFS offered by the Indian Government  No benchmarking applicable to imported machines  Second hand imported machines are often accompanied by unscrupulous trade practices (over invoicing, non-existent or insufficient after-sales services and recycling of used parts and components, sometimes, even entire machines).  Of late lot of Second hand machines are refurbished and imported in the disguise of new looms.

9. 9 TEI – PROPOSAL FOR POLICY INTERVENTIOAN  No incentive for import of secondhand machinery in the form of Subsidies under TUFS or concessional import duty against export commitments  Introduce import duty on second hand machines similar to Automobiles sector  Only secondhand machines of 5 years’ vintage may be allowed for another period of 3 years  Only the old shuttleless rapier looms which are capable of working at a minimum speed of 400 rpm should be allowed.  Benchmarking should be introduced for imported machines as well.

10. 10 AUTOMOBILES IMPORT– CASE STUDY Overall import duty on new/ used automobile is more than 100%. Relevant sources: http://www.cybex.in/indian-custom-duty/Motor-Cars-Duty-Calculator-87032391.aspx https://sites.google.com/site/secoshippingservices/services/imports/import-of-used-motor- vehicles-to-india https://in.answers.yahoo.com/question/index?qid=20080903084223AALaVgO

11. 11 Thank You