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Siema fears import threat to pump industry

Our Bureau

COIMBATORE, Feb. 21

THE Southern India Engineering Manufacturers' Association (Siema) has expressed fears that the domestic water pumps market would be inundated with cheaper imports if the Government did not come up with suitable fiscal sops for the Indian producers.

It has also sought various measures such as cheaper banks loans and power supply, besides liberal labour laws to give domestic pump producers a level playing field to face foreign competition.

In a memorandum presented to the Prime Minister during his recent visit to Coimbatore, the Siema President, Mr R. Vellingiri, said the existing duty structure of 32.60 per cent on water handling pumps was less than the 67.08 per cent on most of the key r aw materials, barring aluminium which attracted duty at 53.816 per cent. This has made pump import cheaper.

Countries such as China posed a threat to domestic producers as it produced pumps in free economic zones, there was zero per cent duty on raw material and the cost of labour was very low. As a result, the price competitiveness of Indian pumps was seriou sly eroded.

He said if the high cost of duty on raw material needed by the industry, such as copper rod, aluminium, gun metal, SS sheets, pig iron and plastics, was not brought down, the domestic market would be swamped with cheap imports, affecting the large direct and indirect labour force.

There was a dire need for reducing the duty on raw material rather than on finished products, he said. If this could not be granted, then duty on water pumps should be hiked to the level of raw materials.

The Siema President also said manufacturers ``should have the final authority to hire and fire labour according to the quality and quantity of work'', which would be the only solution in bringing down the per unit cost of the product.

He sought a reduction in bank interest rates to the international level of 4 per cent.