Battery makers seek duty differential

By Our Staff Reporter

KOLKATA, APRIL 28. There was a flood of battery imports accounting for 30 per cent of industrial battery market during April-December last year. According to figures available with the Union Commerce Ministry, 1.9 million industrial batteries and 2.59 lakh (6 per cent of total demand) automotive batteries were imported during the period. In the industrial segment, UPS and telecom batteries (especially the four ampere UPS batteries) where domestic producers had invested most in recent years, were the worst hit. The extent of damage in fact was beyond all estimates of secondary battery manufacturers.

Panic stricken, the Indian Battery Manufacturers' Association, a forum of lead acid battery manufacturers, have renewed their long standing demand for import duty differential between raw material, namely, lead and finished products. At present both were charged at 35 per cent. The IBMA wanted a 20 percentage point difference between the two.

Lead is the single largest cost factor in lead-acid battery manufacturing. The association alleges that only 25 per cent of the total demand for lead is available in the domestic market, that too produced by only one company - the public sector Hindustan Zinc. With most of the lead sourced from international market, Indian producers fall a prey to a anomalous duty structure vis-a-vis a maximum of 10 per cent charged by major exporting (to India) nations.

China, the biggest threat to Indian producers, sources lead from the domestic market, Japan has practically no import duty, South Korea charges 8 per cent import duty, Bangladesh (5 per cent), and Sri Lanka (10 per cent). The situation is more or less same in Thailand, Taiwan and Philippines.

Addressing newspersons, the vice president of IBMA and director (automotive) of Exide Industries, Mr. S. Chand, said a large number of batteries were actually routed through the SAARC countries, taking advantage of an even lower import duty. Exports from Bangladesh, for example, attracts a mere 17.5 per cent duty. ``Manufacturing batteries in India are fast becoming unviable and the way things are moving Indian producers may shift their production bases to neighbouring countries and import the finished products in the near future''.

An anomalous duty structure is one thing but what concerns IBMA is `dumping' of batteries at a price ``far below the material cost''. It is based on their petition in December last, the Government issued an interim order on April 9, imposing anti dumping measures on all kinds of secondary battery imports from China, South Korea and Japan.

The Ministry had also initiated investigations on dumping of dry cell batteries by China. Dry cell is allegedly the first casualty of Chinese dumping.

The IBMA expects that dumping had caused a major harm to the unorganised lead acid battery manufacturers, accounting for almost half of the total domestic production. ``Most of them are about to pull down shutters'', Mr. Chand said.

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