CICU slams plan to ban used machinery imports
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80% shuttleless looms in textile sector, 75% construction equipment such as cranes and 50% machine tools are bought second-hand
Avtar Singh General Secretary of the Chamber of Industrial and Commercial Undertakings (CICU), today said that in a supposed bid to boost domestic manufacture of capital goods, the Centre reportedly plans to ban import of used plant and machinery more than five years old. He has requested Central Government not to implement the proposed restriction on import of second-hand plant and machinery by domestic manufacturers.
He further said that the idea that growth need necessarily be at high cost with gleaming new equipment is absurd. The fact of the matter is that there is huge recurring demand for second-hand machinery in Indian industry, to keep upfront costs low, for instance, or simply because of local non-availability.
Upkar Singh Joint Secretary said that to cope up with the changing time, sizable number of MSMEs has started technology up gradation by importing second hand plant and machinery.
The propose ban will greatly affect the already reeling MSME Sector in this adverse economic scenario. Clamping down on such imports would actually limit production and almost certainly nip demand for producer goods as well.
It is to be noted that some 80 per cent of shuttle-less looms in the textile sector are second-hand equipment, some three-fourths of construction equipment like cranes are similarly procured, as are almost half of all machine tools.
The point is that there are clear gains from trade in using second-hand capital goods for domestic manufacture specially MSMEs.
He further said that the proposed ban violates the concept of free trade agreement on such imports. Building new technology by installing first hand high cost plant and machinery is a very costly proposition for MSME Sector.