According to Budget proposals announced, soda ash imports would attract 18.5 per cent down from the previous level of 38.5 per cent.

As per industry sources, lower import duty on soda ash will be good for the users forcing local producers to lower their current high prices. The import duty reduction was almost contrary to the representations made by Alkali Manufacturers Association of India (AMAI) to the finance minster. The domestic soda ash industry representatives, disappointed about the decision, have urged the government to withdraw the reduced import duty on soda ash.

AMAI feels that government has surrendered to the US government's pressure and offered a red carpet welcome to the American National Soda Ash Corporation (Ansac). Industry observers fear that Ansac will re-enter the Indian market with cheaper supplies as it did in 1995-96.

This in turn would have a cascading effect on various other domestic markets, it is feared. This will shatter the already quake-hit economy of Gujarat, which contributes 95 per cent of the domestic soda ash supply.

Reacting to the Budget proposal, AMAI vice president NS Ramchandran said: "We are really surprised as to why is the product (soda ash) been singled out from other commodities for import duty reduction. By this step the government has paralysed local industry, which may perhaps lead to its slow death. We plan to meet the finance minister next week to seek clarifications on this.''

AMAI, a registered body of all soda ash and caustic soda producers, has members like Tata Chemicals, Gujarat Heavy Chemicals, Saurashtra Chemicals, IPCL and Gujarat Alkalies and Chemicals.

Currently, domestic soda ash price is $115-120 per mt and is considerably cheaper than the international prices which range between $135-150 per mt. With duty reduction, the industry fears that overseas exporters may supply the product at a price between $110-135 per mt - cheaper than the local prices.

Adds Ramchandran: ``If the Ansac starts exporting to India at a lower price, this price may go down further by 50-70 per cent from the current level''.Meanwhile, in the domestic market, consumers of soda ash are obviously happy due to lower import duty and they have asked the domestic players to reduce the existing price by 10-15 per cent.

Ansac is the exclusive and sole outfit responsible for export of the commodity on behalf of six American soda ash manufacturers. It includes, FMC Wyoming Corporation, General Chemicals, North American Chemical Company, OCI Chemical Corporation, Solvay Soda Ash corporation and Tg Soda Ash Inc.

Industry representatives fear that lower import duty will attract suppliers from US, China, Kenya, Bulgaria, Australia and Romania, among others to take advantage to enter the Indian market.