Budget 2019: Plastics industry recommends anti-dumping duty to cut imports

The $30-billion plastics industry in India has urged the government to levy anti-dumping duty on finished plastic products to prevent import of cheap and unsafe material, and to also prevent its cascading effect on consumers.

In a pre-Budget recommendation note to the Finance Minister Nirmala Sitharaman, Meela Jayadev, President, All India Plastics Manufacturers' Association (AIPMA), said, “We have recommended the government to increase the custom duty on finished goods to 20 per cent to stop imports of cheap and unsafe material into India, in addition to imposing an anti-dumping or safeguard duty on import of cheap plastic finished goods. Apart from that we have also urged the government for a minimum differential on custom duty between raw material and finished goods at 12.5 per cent.”

Currently, the differential duty on raw material and finished products works out to 5 per cent.

Under free trade agreements, the government has allowed import of finished products at “nil” import duty from a number of Asian countries, which hurts the Indian plastics industry.

The industry called for a capital investment subsidy of 10 per cent for plastic processing machines and 30 per cent for plastic recycling machines. The industry needs Rs 3,000 crore subsidy (Rs 600 crore per annum) under the technology upgradation fund scheme (TUFS), which will help the industry generate 800,000 jobs by 2024. It  will also help in increasing plastic production to 34 metric tonne from existing production of 20 metric tonne.

“TUFS will also help in doubling export to $15 billion in next five years from $8 billion today. The industry’s capacity utilisation is expected to improve to 60 per cent by 2023-24 from around 40 per cent today and revenue growth too by 9 per cent CAGR. The endeavour will also help in saving energy by 30 to 60 per cent,” said Lalit Kumar Singh, Vice President, North, AIPMA.

While supporting central government’s concern over the quality of material being imported, the plastic industry has requested it to avoid mandatory specifications on raw material or fix them at wide tolerance after due consultation with the Indian plastic processing industry. The industry has demanded that all operational difficulties in registration and renewal should be taken care of by the Bureau of Indian Standard (BIS) before making the standards mandatory.

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