Centre targets China with curbs on import of power tiller and components

Importers would now need licence from DGFT as the product has been moved from 'free' to 'restricted' category; China controls more than 30% of Indian market in this equipment

The government has imposed curbs on the import of power tillers and related components in a move that could discourage inbound shipments of these products that come mainly from China, which accounts for over 30 per cent of such equipment used in India.

"Import policy of power tillers and its components is amended from free to restricted," the Directorate General of Foreign Trade (DGFT) has said in a notification.

Putting a product under a "restricted" category means the importer would have to seek a license from the DGFT for the imports.

Industry sources said that a significant amount of power tillers in India are imported from China either as Completely Built Units (CBUs) or their critical parts such as engines are imported from China and assembled here.  

Chinese power tillers and components are almost Rs 30,000-60,000 cheaper than Indian-made ones, putting domestic companies at a huge disadvantage.

A few years back, China occupied a mere 10 per cent of the power tiller market in India, but now controls almost 35 per cent. Over 40,000 power tillers are sold in India each year.

Small farmers in eastern and western India who don’t have large landholdings and can’t afford to buy costly tractors opt for power tillers.

Typically, a power tiller is small multi-utility device of 8 HP power or more, and resembles a tractor. It is mostly used for soil preparation. Its components include engine, transmission, chassis and rotavator.

An average-sized power tiller costs Rs 1.25-2.15 lakh, while a tractor is available for Rs 4-5 lakh. Meanwhile, in its public notice, the DGTF has laid out the procedure for obtaining import licences.

It said that the cumulative value of authorisation issued to any firm in a year would not exceed 10 per cent of the value of power tillers that it imported during the past year (2019-20).

The cap of 10 per cent would also be applicable for components.

The applicant should have been in the business for at least three years and should have sold a minimum of 100 power tillers in the past three years, it said.

"Only manufacturers are eligible for applying for an authorisation to import power tillers or components. The applicant should have satisfactory and proven infrastructure for training, post-sales service and spare parts," it added.