Imports of plastic products under PTAs threatening livelihood of 40 lakh workers: ASSOCHAM.

Imports of plastics finished products under Preferential Trade Agreements (PTAs) specifically from China and other South-Asian Association for Regional Cooperation (SAARC) nations is threatening survival of over 55,000 plastic processing units and livelihood of over 40 lakh workers, apex industry body ASSOCHAM said today.

"The major cause has been the decision taken by the government in May this year to increase customs duty on major raw material plastic granules from five to 7.5 per cent whereas import of finished products continues at zero or concessional duty," said the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

"Many of the units have reportedly been closed down and many more are on the verge of closure, while surviving units are operating at less than 70 per cent of their installed capacity as the sector is witnessing negative growth trends," said Mr D.S. Rawat, secretary general of ASSOCHAM.

"Export of finished products from China is harming Indian plastics finished products manufacturing sector as Chinese manufacturers continue to enjoy various advantages like availability of land and infrastructure at cheaper rates, domestic availability of machinery and capital goods at very low price, cheaper electricity, lower interest rates, lower cost of raw materials and benefits of mega scale of operation," said Mr Rawat.

"There is a need to bring plastics processing sector back on growth path as it will contribute substantially to increase gross domestic product ( GDP), create employment opportunities, help in controlling twin deficits of current account and fiscal, control inflation and provide plastic items to masses at an affordable price," said Mr Rawat. "Special incentive should be provided for export of plastics finished products from India to various countries which will help in growth of the sector and curtail CAD."

To safeguard growth of plastics processing sector, ASSOCHAM has suggested the government that anti-dumping duty or safeguarding duty should be imposed on import of cheap plastic finished products from China and other neighbouring countries.

As high value added tax (VAT) rate of 12.5-14.5 per cent on various finished plastic products of common use in household goods, furniture, industrial inputs and others is resulting in making these plastics products very costly for common man, ASSOCHAM has suggested that it should attract a VAT of 4-5 per cent.

Besides, considering that levy of entry tax by state governments, local body tax, octroi and others on plastics granules, plant and machinery, moulds for use by plastic industry is unduly making local plastics processing industry unviable and uncompetitive, ASSOCHAM has suggested to abolish any such tax or other levies.

Recommending certain immediate steps to boost the plastic industry, ASSOCHAM has suggested the government to roll back customs duty from 7.5 per cent to five per cent on plastic raw materials like PP, PE, PVC, polystyrene and others.

Besides, minimum gap of customs duty between plastics granules and finished products should always be maintained at 7.5 per cent.

ASSOCHAM has also suggested for abolition of anti-dumping duty on imported PVC materials and other plastics granules from other companies and countries. Customs duty of 15 per cent should be applicable on imports of finished products from all countries.

As raw material prices are much higher in north-east and eastern parts of India, ASSOCHAM has suggested that availability and price of raw materials should be same across the country to ensure comprehensive growth of plastics processing industry.

Source : economictimes.indiatimes.com