Page 56 - Plastcs News January 2019

Business news

U.S. lifts tariffs on China-made ONGC to invest Rs 6,000 crore

injection molds in Assam

he Trump administration unexpectedly put a hold on NGC has said it will pump in Rs 6,000 crore in
Tsteep 25 percent tariffs on injection molds imported Odrilling 200 wells over the next seven years in
from China in late December, a decision analysts say Assam in order to increase the output from the state.
is likely to hurt American mold building companies but The investment will take place Sivasagar and Charaideo
help U.S. plastics companies that supply automakers.The districts of Upper Assam, besides planning to hire over
announcement from the U.S. Trade Representative means 300 persons in the state, ONGC Director (Onshore)
that the 25 percent tariffs on injection molds -- imposed S K Moitra said “The ONGC would be investing about
in July as part of the first round of $34 billion in duties Rs 6,000 crore in drilling 200 developmental wells
on Chinese imports -- will be suspended for at least across fields under ONGC Assam Asset in Sivasagar
one year.USTR and Charaideo districts,” Moitra said in a statement.
did not explain The wells are proposed to be drilled during the next
its decision, but seven years starting from the current financial year, he
one attorney for added. “All statutory clearances are being obtained.
the mold making The investment will lead to increase in production
industry said it from the state,” Moitra said. The ONGC is giving
may be a response further impetus to its activities in alignment with
to a flood of more the prime minister’s call for reducing import by 10%
than 200 requests by 2022 and North East Hydrocarbon Vision 2030, he
from plast ic added Talking about hiring in the state, Moitra said:
injection molding “The ONGC Management has always accorded top
companies, many in the automotive supply chain, priority to Assam and in 2019, special focus is being
to exempt their specific mold imports.The USTR given. As a New Year gift, 308 posts for recruitment
announcement is broader than molds, exempting about 30 by ONGC Assam Asset (non-executive level) has been
different categories of imports from the tariffs. Molds are announced.” Maharatna ONGC is the largest crude oil
the largest plastics-related category. "I believe they have and natural gas Company in India, contributing around
had so many requests from companies seeking exemptions
of molds from the tariff, that the government decided
to exclude molds in their entirety rather than spending
resources on each individual exemption request for a
mold," said H. Alan Rothenbuecher, a lawyer for the
Indianapolis-based American Mold Builders Association. "No
one knows for sure why, but that is my opinion. Plastics
processors, however, said the higher costs from the 25
percent tariffs would be hard for them to absorb, causing
significant problems in their already price-sensitive
businesses. While the automotive injection molding sector
was vocal in complaining that tariffs would bite them,
the U.S. mold making industry has clearly faced its own 70 per cent to Indian domestic production. Crude oil is
worsening trade picture in recent years.The U.S. trade the raw material used by downstream companies like
deficit in molds shot up from $1.14 billion in 2015 to $1.53 IOC, BPCL, and HPCL to produce petroleum products
billion in 2017, the last full year figures are available, like Petrol, Diesel, Kerosene, Naphtha, and Cooking
according to a recent report from the Washington-based Gas-LPG. ONGC Videsh is a wholly owned subsidiary of
Plastics Industry Association, which said the U.S. imports Oil and Natural Gas Corporation Limited (ONGC), the
3.5 times as many molds as it exports.The mold trade National Oil Company of India, and is India’s largest
deficit with China rose from $390 million to $498 million.
international oil and gas Company.

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