India is slapping steep tariffs of at least 23 percent on injection molding machines from Taiwan, Vietnam and other Asian countries, saying that India's domestic machinery producers are being hurt by imports dumped at unfair prices.
But the decision is being hotly contested within India, with a trade association for injection molders arguing it will raise costs for those companies, reduce jobs and hold back the development of India's industry broadly, even if it helps machinery producers.
The Jan. 7 announcement from India's Ministry of Commerce & Industry comes after the ministry late last year renewed similar anti-dumping tariffs on molding machines from China for another five years.
The two decisions together essentially put up high walls around India for standard injection molding machines from most of the other Asian producers of such mid-priced equipment.
The initial 2009 tariffs against China priced those molding machines out of the Indian market, allowing Taiwan and other places to increase their exports.
Specifically, this latest decision puts anti-dumping duties in place for five years on imports from Taiwan (27.98 percent), Vietnam (23.15 percent), Malaysia (44.74 percent) and the Philippines (30.85 percent).
It covers molding machines with clamping forces between 40 and 3,200 metric tons, but exempts all-electric molding machines, blow molding machines, vertical injection presses and some specialized injection machines for making footwear.
The Indian government said India's domestic machinery industry suffered “significant and material” harm from the dumped imports and that they “significantly undercut the prices of the domestic industry.”
The government report said India's injection press market dropped from 3,800 machines a year in the 2010-2011 fiscal year (which ended March 31, 2011) to 2,700 machines in 2013-2014.
Domestic production dropped in that time, from just over 2,000 machines a year to about 1,660, and imports from the four countries fell from 881 to 611.
“The dumped imports from the subject countries and other countries account for about 24 percent of the demand in India in a declining market and have thereby worsened the condition of the domestic industry through their volume as well as price effects,” the government said.
A trade association of Indian molding companies argued, however, that the real culprit is not dumped imports but rather the dramatically slowing economy.
The Mumbai-based All India Plastic Manufacturers Association said India's machinery manufacturers made their problems worse by expanding capacity between 2010 and 2014, from 3,600 machines a year to 4,800 machines, and are suffering from those ill-timed investments.
In comments summarized by the Indian government, AIPMA said duties will hurt India's molding industry by raising the cost of key capital equipment and “threaten a more significant number of jobs in the downstream [molding] industry than the number of jobs allegedly at risk in the domestic [machinery] industry.”
The Plastics Machinery Manufacturers Association of India, which first asked for the duties against the four countries in 2014, disputed that.
It said the latest duties will “have insignificant impact on the downstream industry” because it said there was no adverse effect from the 2009 duties against Chinese machines.
The New Delhi-based PMMAI acknowledged that the slowing economy hurt machinery makers but said imports have made the problem worse.
“While it is appreciated that the decline in demand has been partly responsible for the decline in production and sales, the presence of subject imports due to dumping by foreign producers has aggravated injury to the domestic industry,” it said.
PMMAI maintains that after the 2009 tariffs on China, some Chinese manufacturers started shifting production elsewhere. China's largest press maker, Haitian International Holdings Ltd., for example, opened a Vietnam factory, although Haitian officials said that was also to serve the Southeast Asian markets.
Two Taiwanese companies won carve outs from the tariffs. Asian Plastic Machinery Co. Ltd., a subsidiary of Hong Kong's Chen Hsong Machinery Co. Ltd., will have an antidumping penalty of 6.06 percent and Jon Wai Machinery Co. Ltd. will have no anti-dumping penalty.
India's government said those two companies submitted complete financial information to prove their cases.
Taiwan's machinery association called the ruling unfair and said Taiwanese companies will lose market share as a result.
The Taiwan Association of Machinery Industry said India is one of the top five export markets for its injection molding machines and estimated the ruling will cost Taiwanese companies $18 million to $24 million in lost sales annually.
“In order to keep Taiwanese competition in India, Taiwanese makers have no choice but [to] plan to build factories in India,” said Alan Wang, president of TAMI's Plastics and Rubber Machinery Committee, in a statement. “Perhaps [that is the] main purpose of this final decision of Anti-Dumping Duty against Taiwan.”
TAMI also noted that this latest ruling is stricter than the one against China, which only applied to injection machines up to 1,000 tonnes clamping force.