Chemical Industry Calls for 10% Tariff Adjustment to Reduce Dependence on China

The chemicals industry is advocating for adjustments in customs duties in the upcoming Budget, particularly for products like Polyethylene Terephthalate (PET) and Polyvinyl Chloride (PVC). This move aims to reduce dependency on imports from China, the world's leading exporter of key chemical products, including PET resins, Purified Terephthalate Acid (PTA), and polyester fiber.

Industry experts warn that a global overcapacity in these materials, combined with stagnant demand growth in various regions and shifting geopolitical dynamics, could lead to an influx of cheap imports into India. Despite a notable increase in India's domestic production capacity for PET bottle-grade chips, low-cost imports, especially from China, have significantly undermined the competitiveness of local manufacturers.

For PVC, an essential component in construction and other sectors, stakeholders are calling for a review of its tariff structure. They suggest that restoring the PVC duty to pre-2022 levels of 10% would stimulate domestic manufacturing and bolster the economy.

In the Man-made Fiber (MMF) polyester segment, low-cost imports from China are also stifling domestic capacity utilization. The industry argues for an upward revision of tariffs to 10% on polyester, which would not only protect local producers from unfair competition but also enhance production capabilities. This aligns with India's ambitious goal of growing the textile sector to $350 billion by 2030.

The industry has formally presented these concerns to the government, urging timely consideration as Finance Minister Nirmala Sitharaman is set to unveil the Budget on February 1. With these proposed tariff adjustments, the chemicals sector hopes to regain its competitive edge and foster domestic growth.