While exports from India’s chemical industry has benefitted from the closure of some big chemical manufacturing facilities in China, the industry continues to face several challenges and hurdles including the non-tariff barriers. In an exclusive interaction with The Dollar Business, Satish W. Wagh, Chairman, Chemexcil, talks about many such challenges and suggests ways and means to boost exports from the industry.
Interview by Ahmad Shariq khan | March 2018 Issue | The Dollar Business
TDB: The government is working on a draft National Chemical Policy. What are the key recommendations made by the Council in this regard?
Satish W. Wagh (SWW): The biggest challenge that the industry faces is environment-related controls. While we appreciate the need for environmental sustainability, exporters ought to have the flexibility to change product mix, increase production, etc., to take advantage of cyclical demands in the overseas markets. The process of environmental clearance is so time-consuming that by the time clearance is received, the opportunity no longer exists. Besides this, we have also recommended that the government rectify the inverted duty structure that plagues the industry at present.
TDB: What are your thoughts on the Union Budget 2018-19?
SWW: As far as our industry is concerned, the Budget 2018-19 was positive to the extent that the corporate tax rate of 25% has been extended to MSMEs whose turnover is up to Rs.250 crore.
On the negative side, duties have been increased on certain toiletries and on vegetable oil (crude) to 30%, which will make oleochemical products costly and uncompetitive in overseas markets. The Social Welfare Surcharge of 10%, that was introduced on aggregate customs duty, will also increase the cost of our imports.
The Budget has made some amendments in customs facilitation ...