Bengaluru

 

Indian machine tool industry expects a decisive and reformist budget 2019-20 that could set it on a growth path. According to Indian Machine Tool Manufacturers' Association (IMTMA), the industry seeks a combination of policy initiatives, fiscal incentives and specific schemes to upgrade its technology and develop new products to attain global competitiveness. These measures are also necessary in improving export share to 20 per cent and domestic market share to 67 per cent. 

 

IMTMA has recommended higher depreciation on new machine tools manufactured in India at 25 percent. This will encourage investment in Indian machine tools and improve overall productivity of Indian manufacturing. This will also give a fillip to ‘Make in India’ movement. The association wants continued budgetary support to Scheme for Enhancement of Competitiveness in Indian Capital Goods Sector on all its components.

 

It has suggested grant-in-aid to Central Manufacturing Technology Institute (CMTI) for development of new technological solutions for effective deployment in strategic manufacturing sectors such as metalworking machine tools and other capital goods. 

 

IMTMA has recommended retention of weighted tax deduction on R&D expenditure. “Machine tool industry is constrained by technology gaps. It needs to develop advanced technologies and products to serve demanding market segments as well as increase its market share and exports. Tax deduction will help SMEs to undertake R&D and develop newer technologies and solutions,” it added in the press statement.

 

IMTMA has urged the Government to include machine tools, other capital goods and engineering products in the “list of products and services eligible for discharge of offset obligations” of the defence procurement procedure - capital procurement. This will open up export opportunities and make it easy to meet offset obligations.

 

It has suggested modification of tender terms of large government buyers (defence, railways, etc.) to make it equitable for Indian manufacturers. Machine tool industry seeks progressive payment during order execution and judicious relaxation of “prior supply” condition.

 

The apex association wants railways, ordnance factories and large PSUs to set aside 10 per cent of their annual budget on machine tool procurement to award risk-sharing development contracts to develop technologies and products for future.

 

With respect to regional trade agreements such as FTA/PTA and RCEP (for which the government is currently holding talks with other countries), IMTMA - given the uncertainties in global trade - has advised the government to not to enter into any agreements until trade practices stabilise across countries. “Also the agreements need to be structured in a way that the domestic industry interests are safeguarded,” it added.

 

One major difficulty faced by Indian companies in increasing exports is high cost of maintaining on continuous presence in export markets. IMTMA has requested government’s help in setting up Brand India Tech centres in select foreign markets with infrastructure for exhibition of Indian capital goods and engineering products. This will reduce the cost of export marketing.