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REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 27] NEW DELHI, THURSDAY, FEBRUARY 25, 1971/PHALGUNA 6, 1892

Separate paging is given to this Part in order that it may be filed

AS a separate compilation.

MINISTRY OF FOREIGN TRADE

RESOLUTION

TARIFFS

New Delhi, the 25th February 1971

No. 14(5)-Tar/69.—In pursuance of recommendation (6) In paragraph 1 read with paragraph 2 of the Government of India, erstwhile Ministry of Commerce Resolution No. 14(l)-Tar/68, dated the 7th December, 1968, issued on the Report (1908) of the Tariff Commission on the Dyestuff Industry, the Tariff Commission has reviewed the quality, prices, and availability with special reference to the requirements of the small-scale sector of the dyestuff industry, and has submitted a report covering the period January to December 1909. As a suo motu inquiry into the further continuance of protection to the industry is due this year, the Commission has not considered it necessary to review the whole question of pro- tection at this stage, and has confined its enquiry to an examination of the avail- ability, prices and quality of the 33 intermediates in general and 13 intermediates, considered vital for the small scale sector, in particular. The recommendations made by the Tariff Commission in the Review Report are as follows:—

(1) The manufacturers/consumers are experiencing difficulty in securing raw materials/intermediates, and having regard to the fact that sup- plies of Intermediates are not freely available even in foreign countries

(363)

and the position is not likely to improve in the near future, the exist- ing bottle-necks in their supply should be removed. The following suggestions have been made in this connection;—

(i) There should be greater coordination and cooperation among the small and large scale sectors of the industry. They should be able to exchange their products among themselves on the basis of their mutual needs and availability.

(ii) There Is scope for expansion of capacity or setting up of new capacity In respect of some of the intermediates where demand outstrips supply. New manufacturers should be encouraged to come into the field, especially where at present there is one producer qf an Inter- mediate. Producers with captive consumption should be encouraged to maximise their capacity utilisation and with this end In view should, as a first priority, get their import licences for raw materials without much difficulty and without having to depend on export promotion licences.

(iii) In the matter of Issue of import licences for raw materials, preference should be given to actual users of those raw materials, i.e. those who are predominantly engaged in the conversion of these into Intermediates to be further converted either by themselves or by others into finished dyeatuffa.

(iv"i Some further checks should be imposed on the imports, particularly against omnlhus export promotion licences, of certain Intermediates which are already In production or for which adequate capacities exist in the country.

(v) Where intermediates have still to be imported, preference should be given to the small scale sector who have no capacity for the manu- facture of these intermediates directly from raw materials.

(vl) There is need for selective intensification and rationalisation of con- trol over Imports as well as establishment of regulatory control over distribution to ensure equitable sub-division of available sup- plies to all sectoro of the industry. To this end, and to take advan- tage of the possible economies through bulk purchasing, it may be necessary to canalise Imports of raw materials and/or interme- diates through a centralised body like the State Trainln* Corpora- tion. On occasions, it may be necessary to use the same, or some other machinery, to compulsorily purchase and distribute a specific part of the domestic production of Intermediates in short supply In an orderly manner against the genuine requirements of all those who do not possess the facility of manufacturing such Intermediates themselves.

(2) Some steps necessary in the direction of improving the supply position in respect of the following key-Intermediates, where there has been lop-sidedness in Imports, exports and domestic production vis-a-vis the estimated demand, are also recommended.—•

(1) In view of the indigenous demand for BON acid, farther exports of thin item beyond the present commitment should not be allowed until domestic production is able to fully meet the Internal de- mand.

(li) Stepsi should be taken to see that the installed capacity of Dlethyl Meta Amino Phenol is raided at least to the level of 100 tonnes which is the estimated demand. The landed cost of the imported product, compared to the price of the indigenous product, of this product at the present exorbitant price does not seem to be justified.

(iil) While stepping up the capacity of J. Acid and its utilisation. Imports of this product upto 10 per cent m"y be allowed to meet the exist- ing shortage.

(Iv) It should be possible to step up the domestic production of Ortho Anlsldine, particularly since there is a great deal of unutilised capacity for the product. It is not prudent to resort to Imports.

(v) The installed capacity of Ortho Toluldine being more than sufficient to meet the internal demand, steps should be taken to improve the production to avoid imports which are slightly more costly than the indigenous product.

(vi) There appears to be a case for the creation of additional capacity in respect of Paia Toluidine and lor Improving its production. Dependence on imports could easily be curtailed.

(vii) The reduction in th? import quota of Tobias Acid from 20 per cent to 10 per cent is expected to help the utilisation of capacity which Is more than adequate to meet the demand, and reduce dependence on imports.

(viii) Since there is considerable unutilised capacity the manufacture of Para Anisidine can be stepped up with a view to reducing depend- ence on imports.

(ix) It is inadvisable to allow import of Aceto-Acet-Anilide to such an ex- tent as to render a substantial part of the Indigenous capacity idle Reduction In import would help to Increase the utilisation of indi- genous capacity and reduce dependence on imports.

(3) A proper and realistic assessment of existing production (both actual and potential) and demand should be made so that the gap between demand and supply with a small margin, say 10 per cent of estimated demand for unforeseen contingencies, should be filled by imports in a planned manner.

(4) Indigenous prices of some of the intermediates have shown abnormal increases after the grant of protection and have no relationship either to these of the imported products or to the ex-factory prices fixed fit the last inquiry. It is, therefore, desirable to explore the possibility of Introducing some sort of control, formal or Informal, whereby producers will not be in a position to manipulate the prices to their advantage unilaterally without the prior approval of the concerned authorities.

(5) The intermediates should be classified according to their purity per cent

and should bear the IS! mark,

(6) Accurate data in regard to capacity, production, consumption, sale etc Is not available in respect of even large scale sector of the Industry With a view to compiling adequate data, the units should be asked to report to the Director General Technical Development (DGTD) their progress at periodical intervals. Producers' association can also organise collection, maintenance and supply of up-to-date and reliable data about the various aspects of the Industry,

(7) As detailed assessment of capacity, production, quality, prices, supply and demand in respect of the industry is involved, and as the situa- tion Is liable to change from time to time, sometimes at relatively short Intervals, a Standing Committee consisting of a representative each of Directorate General of Technical Development (DGTD) Textile Commissioner, Chief Controller of Imports and Exports' Development Commissioner, for Small Scale Industries as well as two representatives each of the Dye and Chemical Manufacturers' Associations should be set up. This should be headed preferably by a technically Qualified person of standing who is not directly interested in the production, import or distribution of these products. The Committee could keep a fairly continuous watch on th" developing situation and offer advise to the executive authorities concerned for appropriate and timely action.

(8) Government should encourage pilot studies by institutions like the" National Chemical Laboratory, Poona, on production and other as- pects of the economy of Intermediates, which could piovide guidance and expertise for the development of the dyestuff Industry and parti- cularly the small scale producers. The industry should also In its turn develop closer contacts with Institutions engaged in such pilot BirllCtlCS-

(9) The policy of protection as now in operation has by and large justified Itself, as it has helped the industry not only to develop but also achieve a degree of competitive strength and should, subject to the minor operational modifications, suggested in the preceding recom- mendations, be allowed to continue up to 31st December 1971, i.e. when the period of protection to the industry i& due to expire.

(10) Since the overall enquiry into the dyestuff industry is due In 1971, there may not be any particular need for repeating the six monthly reviews aa recommended In Report (1968) on the Dyestuft industry.

2. Government agree with recommendations (l)(i), (5) and (0), to which the attention of the industry is also drawn.

3. (a) Government have noted recommendations (1) Cu) to (l)(vi), (2) (ii) to (2) (ix) and (8) for implementation to the extent possible.

(b) In so far as recommendation (l)(ili) is concerned, manufacturerR of dye- intermediates are already being given import Licences on replenishment basis and from preferential sources. As regards recommendation (l)(iv), only such dye- intermediates, import of which is otherwise permissible under the import policy, are allowed to be imported against export of dyes under the import policy, for Re- gistered Exporters, and there is no omnibus export promotion licence. With respect to recommendation (l)(vl), It may be noted that some Intermediates are already canalised through the State Trading Corporation.

(c) The Industry's attention is drawn to recommendations (l)(ii), (2) (ii) to (2)(ix) and (8).

4. Government accept recommendations (7), (9) and (10). The Standing Committee, referred to In recommendation (7), will be constituted by the Ministry of Petroleum and Chemicals & Mines and Metals (Department of Petroleum & Chemicals). That Ministry will announce the composition and terms of reference of the Committee, which will Include matters referred to in recommendations (2)(i), (3) and (4) also.

S. VENKATESAN, Jt- Secy-

PRINTED BY THE GENERAL MANAGEH, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1 9 71