The association has pleaded for duty-free import of membrane cell plants in order to encourage the conversion of the remaining 50 per cent capacity to energy-efficient and environmentally-friendly membrane cell process. These plants are not being manufactured in the country at present.

The AMAI also wants the government to allow for duty-free import of power plants and fuel bills as the chlor-alkali industry is highly power intensive. Due to the necessity to generate power at lower costs through captive power plants, the government needs to allow for these concessions.

Arguing for Modvat on all inputs including capital goods, power generation oils, industrial infrastructure inside plants like chlorine containers & pipe lines, the association feels that such a step would benefit the industry byreducing the cascading effect of taxes. Such a step would also make the products internationally competitive, argue industry sources.

Last year the country exported 69,919 mt of caustic soda, however, industry sources argue that whenever international prices dip, local manufacturers are outpriced and fail to penetrate the world market. In order to overcome these difficulties, domestic manufacturers have undertaken massive restructuring of operations.

The industry has been hit by quite a few problems including the continuous reduction in customs duties during the last four years, from 110 per cent to 30 per cent. This has made domestic production unviable as imports are much cheaper in comparison. In addition, the high cost of power in India, as compared to other countries in the world has pushed up the cost of production, while overseas manufacturers have adopted a punishing pricing strategy to outwit Indian producers.

The Indian chlor-alkali industry is faced with global competition and seeks tomaintain the competitive edge. In terms of technology, the country is ranked second only to Japan, as nearly 50 per cent of the capacity is run on the energy efficient membrane cell process.