On how conducive is the current scenario for the chemical trade.

After the recent budget the overall activity in the chemical trade has picked up. In many cases prices have gone up due to imposition of special import duty as well as a depreciation of the rupee. Prices have improved mainly due to increase in the landed cost of imported material, which are expected to remain at the same level and may even improve.

On the significant changes that has taken place in the chemical market in the last two decades.

Compared to other traditional lines of business like cloth, steel, the development in the field of chemicals and allied products is of recent past i.e., during last 35-40 years only. Many new products have been introduced and many new applications are being developed.

Trading in may items has almost stopped and at the same time many more items are introduced. Moreover earlier trading used to be 3-4 tier i.e.,importer/manufacturer to stockist to dealer to supplier to ultimate user in which case mostly the source used to remain protected. While today on account of the latest communication facilities, spread of information technology dealings have totally become transparent and so margins have shrunk considerably. Today it is a buyer's market since the production of almost all the items has exceeded the demand, but the volume has increased many fold which compensates earnings to a large extent. All in all I still feel it is a prospective line of business. An entrepreneur involved in the chemical trade has a very bright future.

On how competitive are Indian traders vis-a-vis foreign traders?

In spite of poor port and road infrastructure Indian traders are still very competitive and they work with very low margin. On the export front, chemicals exports from India, account for a meagre 8 per cent of the total exports from the country and there is still a great scope to boost exports by developing unexploredmarkets especially in Latin America and Africa.Specifically, since dyes and drugs are the major sources of export earnings, it may be worthwhile to tap the opportunities that have arisen in these spheres.

For instance, the strengthening of the green movements and the growing protests against environmental pollution in many western countries provides an opportunity to India to emerge as a prominent player in the global dye market. The growing concern for ecology has forced many units in the west to close down. In the USA companies like Allied Corporation, American Cyanamid and Dupont have stopped making dyes. The trend now is to import crude dyes from developing countries like India and manufacture the finished product at the same time concentrating on marketing and R&D. Given the global tendency of taking full advantage of lower labour costs and less stringent effluent legislation, India has a competitive edge which has been sharpened by the relative abundant availability of technical manpower. In case ofthe other major area exports viz. drugs and pharmaceuticals, the long list of drugs going off-patent over the next five years has unraveled a host of opportunities for the manufacturer/exporters.

On what the trade lacks and what is needed for enhancing trade activity in the country.

Storage & Transport of Chemicals

Storage of Hazardous chemicals poses a serious problem considering the nature of the items we are dealing in, the state government should allot a plot for the warehouse purpose exclusively for the storage of hazardous chemicals preferably near Jawaharlal Nehru Port Trust (JNPT). Gujarat and Maharashtra are the leading states having largest chemical units and the storage and movements of hazardous chemicals are the problems that requires government attention.

Sales Tax

On certain chemicals government has reduced the tax to four per cent which has definitely ensured the better compliance but for many chemicals rate of sales tax is still 13 per cent which is unusuallyvery high, even very recently by issuing notification dated June 9, 1998 many vital industrial chemicals are removed from the list of items attracting four per cent and so they will again be liable for 13 per cent which is a regressive step. Even for inter-sales states non availability of "C" forms with many state sales tax departments causes undue hardships.

Central Excise

We dealers were bought into the rules of central excise from 1st April 1994 onwards to pass on the Modvat to ultimate user. As traders neither collect excise nor availing Modvat the procedure for passing the Modvat should be made simpler.Condition of godown for excise registration should be done with as passing of Modvat is based on properly authenticated documents by the concerned authorities.

Payments

The payment of the material supplied to the user industry is unusually delayed and in most of the cases beyond 90 days to 180 days creating a liquidity problem, more over incidences of bad debts are risingalarmingly, recovery of bad debt through jurisdictional process takes long time even in some cases it takes upto ten years. There should be a special court to expedite disposal of the cases.