In a significant move aimed at reducing dependency on China for agricultural equipment, India has imposed restrictions on imports of machinery used to till farmlands.
The Directorate General of Foreign Trade (DGFT) has changed its power tiller import policy to “restricted” from 'free'. This essentially means that the power tiller importers will have to apply for a licence.
The government has also put in place additional guidelines such as imposing a cap on imports, making it tougher for importers to place global orders for the product.
The DGFT said: “The cumulative value of authorisation for import to firms in a year will not exceed 10 percent of the value of power tillers imported by that firm in the past year i. The cap of 10 percent will also be applicable on the components of power tillers.”
The other changes for the importing company include the need to be established in business for at least three years and sales of at least a hundred power tillers in those years.
For last six to seven years, tillers have been in huge demand specifically from small farmers as they are priced at almost a third cheaper than tractors. However, there are only two power tiller manufacturers in India - VST Tillers Tractors Limited (VST) in Karnataka and Kerala Agro Machinery Corporation (KAMCO), in Kerala, while at least 11 Chinese brands are present in the Indian market, including George Maijo, Sharachi, Rhino, and Universal.
In a study, the agriculture ministry found that India’s power tillers cost more than the ones imported from China.
"Chinese power tillers are around 10-20 percent cheaper than the indigenous power tillers,” said the report by the expert committee on power tillers submitted to the Indian agriculture ministry in 2017.
In the wake of Covid 19, Indian Prime Minister Narendra Modi has called for a self-reliant economy. After announcing a $266 billion economic stimulus package to deal with the pandemic, the prime minister urged Indian corporates and businesses to invest locally.