BENGALURU: The 7% customs duty announced on Tunnel Boring Machines (TBMs) is likely to boost the manufacture of these giant-sized machines across India. At present, India imports TBMs from China and European countries.These machines are used in underground tunnelling work in India by Metro Rail, Railways, National Highways and the Central Public Works Department. The Bangalore Water Supply and Sewerage Board is expected to use them too in the future.
An expert (requesting anonymity) said that there were only a couple of players manufacturing these machines in India. “Each costs around Rs 80 crore. When you compare with a country like China which produces them in bulk, has huge manufacturing facilities and no major taxes levied on manufacturers, companies in India are having a massive disadvantage,” he said.
In the case of Bangalore Metro Rail Corporation Limited, it brought 6 TBMs for its First Phase from European countries. For the second phase, it is using 9 TBMs — six from China and three being manufactured by German firms within India for the Underground Corridor between Nagawara and Gottigere. “Levying such a duty on them would jack up the cost for contractors to bring them in from outside. This will result in a massive push to local manufacturing,” he pointed out.
In the case of a machine which costs `80 crore and is imported from abroad, the customs duty would be around `5.6 crore, the expert said. “Often the difference in bid amount between the first bidder and the second bidder in some Metro stretches for different contracts pertaining to the underground stretch would only be `6 to `7 crore. So, this move is bound to make a big difference,” he added.
At present, anyone who manufactures TBMs within India, needs to pay the GST too and this also deters those planning to enter the business, the expert said.There will be no immediate impact on costs for BMRCL as the TBMs required for Phase-II have already entered the country.