India expands dumping penalties on Chinese molding machines

New Delhi — India has expanded its anti-dumping duties on Chinese-made injection molding machines, putting new financial penalties on presses above 1,000 metric tons of clamping force.

A Feb. 16 announcement from India's Ministry of Commerce and Industry said that injection molding machines from 40-3,200 tonnes will now face duties of 43.59 percent. Previously, the duties stopped at machines larger than 1,000 tonnes clamping force.

India's Directorate General of Trade Remedies opened an investigation in February 2021, following a petition from the Plastics Machinery Manufacturers Association of India on behalf of the largest makers of molding machines in India, Shibaura Machine India Pvt. Ltd. and Milacron India Pvt. Ltd.

The DGTR ruling said those two companies, which are units of Japanese and U.S. firms, account for more than 50 percent of India's domestic production of molding machines.

DGTR said that imports increased during the period it was investigating, from April 2019 to September 2020, in both absolute terms and relative to Indian consumption.

"The subject imports are undercutting the selling price of the domestic industry… and also causing suppression effect on the prices of the domestic industry," the agency said. "Overall performance of the domestic industry has deteriorated in terms of production, sales and capacity utilization."

"The Authority therefore concludes that the domestic industry has suffered material injury," DGTR said.

PMMAI said it supported the government decision.

"The industry considered that Chinese producers were resorting to dumping and causing injury to Indian industry," it said.

The DGTR announcement said a planned $30 million investment by Milacron in its Indian operations was "put on hold due to low demand."

India has imposed duties on some Chinese press imports since 2009, and in 2016, it added antidumping penalties on molding machines made in Taiwan, Vietnam, Malaysia and the Philippines.

In recent years, some Chinese press manufacturers have set up factories in India.

Haitian Huayuan Machinery (India) Pvt. Ltd., a subsidiary of China's largest molding machine maker Haitian Plastics Machinery Group Ltd., invested 2 billion Indian rupees ($26.8 million) in an assembly facility in Gujarat six years ago.

Haitian assembles machines there, including those above 1,000 tonnes, using imported components. It argued that imposing higher duties on the large presses does not make sense because India has limited domestic manufacturing of components.

"India does not offer facilities for casting platens, injection units [or] screw barrel of relevant size," said Venu Dabeer, general manager of sales in Haitian's India operation. "Therefore, we opt for the import route for procuring raw materials in knock down or semi knocked down forms.

"There is hardly any company, barring one or two, producing injection molding machines above clamping force of 1,000 tonnes in the domestic market," Dabeer said. "When the volumes are not high, what is the point of extending the anti-dumping duty beyond 1,000 tons?"

Another Haitian Huayuan executive, Director Sunil Dutt Chaudhari, said plastics molding companies will face longer delivery times and higher prices from the 43 percent tariffs.

"The extension of anti-dumping for such a low number is not justifiable as the local manufacturer monopolizes and hikes the prices," he said. "The consumer will suffer."

But the Indian plastic machinery trade group said it sought the duties on machines from 1,000 tonnes to 3,200 tonnes because it believes the domestic industry has the capacity to make larger machines.

"Despite anti-dumping duty, imports of machines from China continue," PMMAI said. "We strongly believe that Indian manufacturers have capacity as well as capabilities to meet local demand for this segment."

PMMAI said that industry estimates say Chinese presses are more than 20 percent of the Indian market, but it added that with sufficient capacity in India "imports are entirely unnecessary."

The Indian government announcement noted that some respondents to its investigation said imports were not hurting the Indian industry, arguing instead the COVID-19 pandemic slowdown was a major cause of problems in the Indian machinery industry.

The DGTR report said the Indian machine industry "does not deny" that a COVID-19-related slowdown in automobile manufacturing hurt business, but it said that imports also caused harm and noted that Indian law does not require imports to be the only cause.

Previous rounds of dumping duties in India's industry had prompted debate in the country, with leaders of some injection molding companies opposing the duties while machine makers fought for them.

India's injection press market is about 55 billion rupees ($731 million) annually, according to PMMAI.

The trade group estimated the market at about 9,000 units a year in clamping forces from 40 to 3,200 tonnes. That includes about 100 machines above 1,000 tonnes.

Other Asian press makers have announced investments in India.

Taiwan-based Fu Chun Shin Machinery Manufacture Co. Ltd., in 2020 announced an investment of $5.4 million in a 430,000 square foot plant in Gujarat.

A company announcement said the plant was expected to open in 2023, with eventual production capacity of 1,000 units, ranging from 100-3,000 tonnes of clamping force.

In 2019, Fu Chun Shin opened a pilot plant in Gujarat with capacity of about 300 machines a year.