Don’t raise import duty on raw material: Plastic industry urges govt

plastic, plastic industry

The plastic industry, which is expected to touch Rs 5 lakh crore mark by 2025, from the existing size of rs 2.25 lakh crore, has urged the government to support micro, small and medium enterprises (MSMEs) in the sector and not to increase import duty on raw materials.

Industry leaders have strongly opposed the proposal of the Indian Chemical Council to hike import duty on raw material as it could lead to supply disruption and, in turn, will affect the cost competitiveness of 50,000 plastic processors in the country.

They have asked the Centre to increase the customs duty on finished goods to 20% to stop the imports of cheap and unsafe materials to the country. They have also demanded the imposition of anti-dumping or safeguard duty on import of cheap plastic finished goods and maintaining the minimum gap in customs duty between raw materials and finished goods at 12.5%.

Meela Jayadev, president of the All India Plastics Manufacturers’ Association (AIPMA), said the industry opposes proposal of Indian Chemical Council for increasing import duty on raw material.

Increasing customs duty on raw material will lead to supply disruption and in turn affect cost competitiveness of 50,000 plastics processor in India, he said, adding that the sector recommends that the government should increase the customs duty on finished goods to 20% to stop imports of cheap and unsafe material in the country.

At a recent meet of All India Plastics Association/Processors , he pointed out that the plastics industry will help India become a $5 trillion economy, for which the Centre needs to support MSMEs in terms of good infrastructure, easy financing and favourable regulatory policies. The sector is expected to employ six million people by 2025 compared to 4.5 million now,” said Arvind Mehta, chairman, governing council, AIPMA.

The association has called for imposing anti-dumping or safeguard duty on import of cheap plastic finished goods. The minimum gap on customs duty between raw material and finished goods should always be maintained at 12.5% and plastic finished goods (plastics and its articles) should be excluded from all FTA’s, he said.

According to the association, the Extended Producers Responsibility (EPR) should not be imposed on processors manufacturing less than 1,000 metric tonne per annum and turnover of Rs 25 crore.

EPR contribution of processors should be in proportion to the value addition and MSME’s should be absolved of all compliances since it is difficult for MSME’s to comply with proposal drafted by MoEF. The industry strongly supports the TUF proposal submitted to GOI and capital investment subsidy of 10% for plastics processing machines and 30% for plastics recycling machines. The Government has proposed making BIS standards of certain items as mandatory, which are presently voluntary in nature. They propose to initiate action under section 16 of the BIS Act 2016 which empowers the Central Government to make BIS standard mandatory in the public interest. He said that while the industry supports Government’s concern of importing safe and quality material., the government should avoid mandatory specifications on raw material or fix them at wide tolerance after due consultation with the Indian plastic processing industry.

AIPMA strongly recommends that Government should prepare a comprehensive plan to support the processing industry before taking steps to make mandatory standards for finished goods, he said.
The government plans to ban Single Use Plastics by 2022. The industry is aligned towards Environment protection. Pointing out that banning is not the solution, the association suggested phasing out and banning of specific products/ group of products should be considered only after due process to understand 360 degree view.


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