On the back of disinterest shown by entrepreneurs to invest in Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) set up across India; the Indian government will cast a fresh look at the inverted duty structure prevalent now.
Under the current duty structure, whether it be naphtha and its downstream products like ethylene, propylene and benzene, all attract 5 percent duty.
“However, in cases where these imports are made from countries with which India has signed Free Trade Agreements (FTA’s), the duty on downstream products turns out to be much lower than those imposed on raw materials”, a top source in the Chemical and Fertilisers Ministry told fibre2fashion.
“The inverted duty structure turns in to a disincentive for petrochemical producers, who are shying away from making any new capital expenditure”, the source added.
The proposal to abolish inverted duty has been floating around for a long time and has been under consideration in the Chemicals Ministry and Planning Commission. It is now expected that in order that the sector attracts the targeted investment, the government may take a fresh look.
