The Process Plant and Machinery Association of India (PPMAI) has expressed concern on surge in metal and capital goods imports from countries such as Korea, Indonesia, Malaysia and Japan with whom India has pacts to promote free trade. It said that the Free Trade Agreements (FTAs) along with lack of reciprocity is adversely hurting the steel manufacturers as well as the capital goods industry. It added that FTAs are meant to increase bilateral trade.
However, PPMAI has said that India's FTAs with ASEAN countries and Japan have only resulted in increasing imports of metals and capital goods with either stable or declining exports leading to the rising trade deficit. It pointed out that despite several steps taken by the government including imposing anti-dumping duties, countervailing duties, quality control and anti-circumvention measures the problem of surge in imports especially stainless steel, finished capital goods and other metals persists.
It further said that the excess capacity in China and FTA countries such as Japan, Indonesia and Korea and their ambition to sell at lower than domestic price levels due to zero duty advantage in Indian market is posing a stiff challenge to the domestic metal manufacturers and capital goods industry. It suggested that FTA should be a level playing agreement and not a one way street as it is currently prevailing. It added that currently, all FTA countries are taking full advantage by exporting metals as well as finished capital goods into India but they are not importing metals and capital goods.