Members of the chemicals and plastic processing sectors have expressed their disappointment on the proposals of the 2003-04 budget, as the finance minister has not offered any of the expected incentives. If these were available it would have helped the respective industries to tide over the current recessionary trends and be able to explore the export market.
Instead, the government has lowered the peak customs duty by 5 per cent to 25 per cent. This means that the protection will be lower for the two main petrochemical producers - Reliance Industries and Indian Petrochemicals Corporation -- as also for the others.
Industry players say the drop in duty rates comes at a time when global prices of petrochemicals, polymers and other chemicals are at their peak levels. This is due to the high prices of crude oil, a major raw material for petrochemicals, and other downstream products.
The volatile crude oil prices have jumped almost 20-25 per cent during the last six months. The lowering of import duty, therefore, adds to the woes of the industry. Despite lower landed cost the petrochemical producers are unlikely to lower their selling prices. The full impact of the move will be felt from the first quarter of the next fiscal year.
