Petrochemicals play a vital role in economic development and growth of the country as it enables the growth of other sectors in economy which includes agriculture, infrastructure, healthcare, textiles and consumer durables.
The petrochemical industry is currently facing difficulty with pressure on prices and margins.
Domestic industry has made huge investments in creating new capacities for products like Polyethylene and Polypropylene.
In order to maintain the financial viability of these new investments, appropriate fiscal support is critical. In certain key products like Poly Vinyl Chloride, investment has been severely lagging demand growth due to a lack of a facilitative fiscal structure. This is undermining the “Make in India” campaign and the vision for India’s leadership in manufacturing.
There are already large imports and huge outflow of foreign exchange. The situation would get aggravated as the trade gap continues to widen.
Per capita plastic consumption in India is still hovering at 11 kgs as compared to 46 kgs in China 65 Kgs in Europe and above 100 kgs in USA. . This signifies huge potential for future However, this sector also has negative public perception basically for reasons of improper plastic waste.
Issue: Even after seven years of the Petrochemical Policy rollout, nothing much has happened.
FICCI Stand: FICCI is facilitating Review of Petrochemicals policy to make it effective.
Issue: Adverse Impact of Free Trade Agreements (FTAs). FTAs create an ‘inverted duty structure’ making it cheaper to import a finished product rather than manufacturing or assembling it in India.
FICCI Stand: FICCI has been constant in seeking a review of such FTAs as also lowering of import duties for feedstocks to facilitate domestic production.
Issue: Lack of feedstock
FICCI Stand: PCPIR concept being reviewed at FICCI initiative with planned allocation of feedstock for downstream industry. Potential of coal chemicals being considered.To reduce import duty on feedstock and also to encourage renewable/green feed stocks brought to the table.