India proposes to impose a 15% tariff on imported petrochemical products

Recently, the Indian government proposed to levy a 15% tax on all imported petrochemical products in the current fiscal year ending March 2021 due to the sluggish domestic industry due to the epidemic situation. The proposed temporary tariffs apply to all imported products under the Indian Free Trade Agreement (FTAs), including organic and inorganic chemicals, plastics, rubber, rayon and staple fibers. However, due to higher production costs, downstream end users in India strongly oppose this measure called "Coronavirus Tax". The Indian coronavirus tax was originally scheduled to be valid for 11 months from May this year, but it has not yet been implemented.

A member of the All India Plastics Manufacturers Association said: "Government representatives have promised us that they will maintain the tax status of imported chemicals and petrochemical products. Due to the current global crisis, consumer demand has been suppressed. However, lower polymer prices, And the affordable prices of finished plastic products may push up demand, thereby helping to retain nearly 5 million jobs in the plastic processing industry." A government official said: "The Indian chemical and petrochemical sector is still This proposal is to be consulted with stakeholders."

The country’s official data shows that in April, India’s merchandise exports fell 60.3% year-on-year, of which, chemical exports fell 41.9% year-on-year to 1.2 billion US dollars, and petroleum products exports fell 66.2% year-on-year to 1.24 billion US dollars. In April, India’s exports of rayon/fiber fabrics fell 84.1% year-on-year to US$61.76 million, while plastics exports fell 25.4% to US$478 million. During this period, India’s chemical imports fell 35% year-on-year to US$1.3 billion, chemical fertilizer imports fell nearly 18% year-on-year to US$349 million, and crude oil and petroleum products imports fell nearly 60% year-on-year to US$4.7 billion .