Plastic industry demands restructuring of customs duty, anti-dumping duty

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Published: December 13, 2019 2:49:19 AM

All India Plastics Manufacturers Association president Jagat Killawala said taking into account the short-term as well as long-term growth of plastics processing industry, the associations have unanimously demanded that government should not come under pressure from any quarter to increase custom duty on key raw material.

Plastic,Plastic industry, customs duty, anti dumping duty, industry newsThe meet was attended by more than 70 participants representing 31 industry associations from across the country; industry leaders and other key stakeholders.

The All India Plastics Manufacturers Association (Aipma), representing 22,000 industrial units, has demanded immediate steps from the government to restructure custom duties and anti-dumping duty on import of cheap finished products.

Apart from these demands, the sectoral body also wants review of foreign trade agreements, enforcement of mandatory BIS standards and technology upgradation fund for the industry, among others.

The Aipma had organised a meeting held in Mumbai to discuss emergency measures that need to be taken by the central government for revival of the plastic industry. The meet was attended by more than 70 participants representing 31 industry associations from across the country; industry leaders and other key stakeholders.

Major plastics associations at the meet were Gujarat State Plastic Manufacturers’ Association, Organisation of Plastics Processors of India, Maharashtra Plastic Manufacturers Association, Karnataka State Plastics Association, South Gujarat Plastic Manufacturers Association, Saurashtra Plastic Manufacturers Association, Pimpri-Chinchwad Plastic Association, Telangana and Andhra Plastics Manufacturers’ Association, Indian Plastics Federation and Plastics Export Promotion Council, among others.

All India Plastics Manufacturers Association president Jagat Killawala said taking into account the short-term as well as long-term growth of plastics processing industry, the associations have unanimously demanded that government should not come under pressure from any quarter to increase custom duty on key raw material.

“The industry demanded that custom duty of PVC should be brought down from 10% to 7.5% as nearly 50% of demand in India is being met through imports due to lack of domestic capacity. Any increase in custom duty will affect the agriculture sector due to high use of PVC pipes and fittings. Custom duty of polypropylene and polyethylene should be retained at 7.5%. If increased, it would have adverse effect on automotive, health care segments and would lead to cost increases in the value chain,” he said. “Increasing tariff for PET will affect the processing and consumer segment and thus tariff for PET should be retained to 5% to nurture consumer products consumption. The association has also demanded that customs duty on SAN (styrene acrylonitrile resin) and ABS (acrylonitrile-butadiene-styrene) should be brought to 5% to nurture associated industries growth.”

“The industry is currently witnessing depression which has led the industry to halt their expansion and investment plans,” said Arvind Mehta, chairman, governing council, Aipma.

“The plastics processing industry comprises over 50,000 micro and small units employing around 50 lakh people. It is a major contributor to the Indian economy manufacturing goods worth Rs 3.75 lakh crore annually. However, it is under severe strain due to cheap imports from China and other south Asian countries. Industry demanded the Delta of minimum 10% should be maintained between custom duty of raw material and plastics finished goods.”

According to the association, the domestic industry is suffering due to dumping by China and other countries at a minimal cost. The industry has demanded that to prevent under invoicing by foreign players and floor pricing should be established on finished goods. It also demanded the directorate general of trade remedies should recommended anti-dumping duty on plastic finished goods, originating in or imported from three major nations, including China, for at least five years.

“Existing FTAs with various countries have failed. It has resulted in massive import of finished goods from FTA countries into India at zero or concessional duty badly affecting competitiveness of Indian plastics processing industry. However, exports from India to these countries have marginally grown leading to huge trade imbalance. Therefore, Industry demanded that all existing FTA’s be reviewed and Polymers and Products made of Polymers shall be excluded from all FTAs,” KIllawala said.

“Government of India is planning to enforce mandatory BIS standards on raw material. Industry felt that this move would put small enterprises to disadvantage and allowing imports of semi-finished and finished products, which are made from very raw materials which are being denied entry by imposing non-tariff barrier to trade (NTBT), would not be in the best interest of the nation. Industry demanded that both BIS and international standards should be considered at par. This would avoid unnecessary compliance burden on the raw material suppliers and at the same time ensure import of safe and quality material,” Mehta said. On the other hand, Small units would face major disruption if BIS standards are made mandatory on plastic finished goods due to compliance burden, high cost of certifications and renewal, non-availability of adequate facilities for testing and harassment by authorities, he pointed out. The plastics industry has also demanded that the long pending proposal for Technology Up gradation Fund on the lines of Textile industry should be implemented immediately to spur the export growth.

The industry raised serious concerns with respect to insurance companies exponentially increasing premium for providing insurance coverage against fire and safety. Industry is also deeply distressed as most of the insurance companies are declining to provide insurance coverage to MSME’s in plastics processing industry. Industry demanded government to immediately roll back the increase of insurance premium as this is detrimental to the efforts to help the MSMEs for increasing their market share and increase their contribution in the GDP.

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