 "Government should consider setting up reverse SEZs: Sudhir Shenoy")
Recent actions of the Narendra Modi led government reflecting its commitment to bring in reforms has significantly improved the sentiment in market in last few months.
In order to enhance competitiveness of manufacturing sector, especially in the context of the chemical industry, the government should set up clusters that share common infrastructure facilities and provide critical mass. They ought to also consider setting up reverse SEZs - chemical complexes in resource rich countries such as Africa, Middle East etc. This can help Indian companies to source competitive feedstock available in these countries to make chemical building blocks that can help to meet our country's needs and to achieve economies of scale.
ALSO READ: Indian government plans for first reverse SEZ in Iran
It is also necessary to facilitate import of cheaper feedstock through implementation of 'zero duty' on the import of chemicals. Also, import duty on important chemicals such as butyl acrylate and polyethylene, should be reduced to bring it at par with Singapore. These chemicals are important industrial input and are used in various industries such as paint emulsions, auto sector, construction industry, agrochemicals and packaging. The rationalisation of import duty on these chemicals will help create level playing field for import from wide spread geographical area that can encourage diversification in import basket.
The new government also needs to look at creating a ‘Technology Up-gradation & Innovation Fund’ (TUIF) that can incentivise firms to make investment in research and development and to upgrade its technology to meet global standards.
As per one of the agendas of the honourable finance minister, we also would like to see the roll-out of the Goods & Services Tax (GST), at the earliest. We hope that the new government will be able to resolve all the pending issues in relation to GST. This will benefit corporations from simplification of the tax structure. It will also lead to reduction in input costs in many cases making several products competitive on the global stage.
These reforms, if implemented, would go a long way in facilitating the growth of chemical industry.
In order to enhance competitiveness of manufacturing sector, especially in the context of the chemical industry, the government should set up clusters that share common infrastructure facilities and provide critical mass. They ought to also consider setting up reverse SEZs - chemical complexes in resource rich countries such as Africa, Middle East etc. This can help Indian companies to source competitive feedstock available in these countries to make chemical building blocks that can help to meet our country's needs and to achieve economies of scale.
ALSO READ: Indian government plans for first reverse SEZ in Iran
It is also necessary to facilitate import of cheaper feedstock through implementation of 'zero duty' on the import of chemicals. Also, import duty on important chemicals such as butyl acrylate and polyethylene, should be reduced to bring it at par with Singapore. These chemicals are important industrial input and are used in various industries such as paint emulsions, auto sector, construction industry, agrochemicals and packaging. The rationalisation of import duty on these chemicals will help create level playing field for import from wide spread geographical area that can encourage diversification in import basket.
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The new government also needs to look at creating a ‘Technology Up-gradation & Innovation Fund’ (TUIF) that can incentivise firms to make investment in research and development and to upgrade its technology to meet global standards.
As per one of the agendas of the honourable finance minister, we also would like to see the roll-out of the Goods & Services Tax (GST), at the earliest. We hope that the new government will be able to resolve all the pending issues in relation to GST. This will benefit corporations from simplification of the tax structure. It will also lead to reduction in input costs in many cases making several products competitive on the global stage.
These reforms, if implemented, would go a long way in facilitating the growth of chemical industry.