Paswan favours 8-10% excise duty cut for chemical ind
June, 23rd 2008
Chemicals and Fertilisers Minister Ram Vilas Paswan said he will urge Finance Ministry to reduce excise duty to 8-10 per cent from 14 per cent to give respite to dyestuff industry.
"In view of the growth of the dyestuff industry, we will take up the matter with the Finance Ministry to reduce the excise duty from 14 per cent to eight-ten per cent," Chemicals and Fertilisers Minister, Ram Vilas Paswan said, while addressing the dyestuffs manufacturers association of India's (DMAI) AGM here.
Paswan assured the industry that he would also look into the demand of doing away with the anti-dumping duty on basic chemicals.
"When there is no dumping, there is no sense in imposing an anti-dumping duty," he said.
Anti-dumping duty is imposed by the Indian government when any item less than its normal value is dumped in its domestic market by any other country so as to cushion the sale of domestic products.
Both India and China have a huge market potential for developing the chemical industry.
"Research and development is a big problem for us. We do not have constraints of money to invest in R&D but we have to overcome that to remain competitive," Paswan said.
The 20 per cent growth rate target for the dyestuff industry is good but our global share needs to be increased, he added.
The Indian dyestuff industry has a 10 per cent share in volume in global dyestuffs production worth Rs 15,000 crore. Exports are estimated to increase to Rs 12,000 crore in FY'10 from the present Rs 10,000 crore.
India is emerging as a global supplier of dyestuffs and intermediates particularly in reactive, acid, direct and Vat dyes and some key intermediates.
However, it has to be noted that despite an all round economic growth, the per capita dyestuff consumption of 50 grams in India is one of the lowest in the world and significant opportunities exist for increasing consumption of dyestuffs in the domestic market.
"The colourant industry's growth hampered in the last one year was due to an exorbitant price rise in raw materials across the board partly due to the surge in crude oil prices to around USD 130 per barrel," Dmai president, Janak Mehta, said.
"Apart from price rise, non-availability of basic raw materials has drastically created a dent in our production," Mehta added.