I cannot stop all imports, says Nirmala Sitharaman; Indian aluminium producers get the message

Even as the clamour against increasing imports from countries like China has been growing louder, commerce and industry minister Nirmala Sitharaman said last week that the onus was on the industry to deal with rising imports of several essential items.

“I cannot stop all imports... but India’s manufacturing companies have to capture this market and identify how they can link themselves to the global value chain,” she said at the Make in India event in Mumbai last week.

Sitharaman’s remarks came shortly after K.M. Birla, chairman of the Aditya Birla Group, took strong objection to dumping by China. “It’s creating an unlevel playing field. It’s like asking someone to play cricket with one hand,” said Birla.

Birla’s firm Hindalco Industries Ltd, India’s second largest aluminium producer, has been at the receiving end of imports from China. The company is grappling with debt that has more than doubled to about $11 billion in the last four years as cheaper imports from China weigh on profit.

A slowdown in China’s economy has led to a global aluminium glut, forcing many producers to idle capacities. Some of the world’s surplus has been flowing into India at lower prices, and domestic producers have sought a doubling of import taxes from the government.

India plans to impose a 10 per cent safeguard duty on aluminium and may raise import tariffs on primary and downstream products to curb cheaper imports from China and other Asian nations. India’s economy, the third largest in Asia, is expected to grow 7.6 per cent in 2015-16 ending March, overtaking a slowing China to be the world’s fastest growing major economy.

The six-month safeguard on in-bound shipments of the light-weight metal may be put in place within the next two months after discussions with other government departments, Bloomberg reported on 4 February. Also, finance minister Arun Jaitley may announce import levies in his Budget speech on 29 February.

Amitabh Kant, secretary, department of industrial policy and promotion, said that India must become a disruptor in the world to take its manufacturing forward as industrialists can’t demand the right to exports without allowing imports in a globalized world.

Make in India is the current government’s flagship initiative, launched by the Prime Minister in September 2014, to encourage international companies to manufacture their goods in India. Make in India Week is the flagship event to provide greater momentum to the Make in India initiative, and to showcase to the world the achievements of the nation in the manufacturing sector.

Government’s manufacturing push comes amid falling overseas shipments. India’s exports shrank in January for the 14th straight month on continued weak demand from Europe, but the Reserve Bank of India (RBI) said it would not follow countries such as China and Japan in pushing down the currency to help.

Exports fell 13.6 per cent from January a year ago, while imports contracted 11.01 per cent, data from the ministry of commerce and industry showed on Monday.