The plastic suppliers and processors have urged Prime Minister Narendra Modi to constitute the Petrochemical Regulatory Authority to make a fair pricing mechanism and assure that PSUs like IOCL, GAIL, BPCL assistance domestic plastic processing units. The Indian Plastic Federation (IPF), the apex body of plastic processors, have urged the PM in the wake of undue profiteering the petrochemical business was generating leaving the Indian plastic processors in a lurch.
The government’s anti-dumping duty and mandatory BIS requirements have been building a non-tariff barrier and the Indian plastic processing business becoming import-dependent has to face a enormous dilemma. The IPF has demanded an instant ban on the export of the raw material, polymer, from India to ease supplies in the nation and verify the price tag rise imposing zero duty on polymer imports.
The Indian plastics business, primarily competing with China, constitutes of more than 50,000 plastics processing units of which 90% are MSME. The sector straight employs more than 50 lakh men and women and contributes more than `3 lakh crore to the country’s GDP.
Prices of the raw supplies like PVC, ABS, polypropylene, Computer, PET have enhanced ranging amongst 30% and 140% more than the final 5 months. “The petrochemical companies are taking advantage of the surge in polymer prices by restricting the supplies to domestic processing units and releasing the material after the price increase in regular intervals. The PSUs have also joined hands with private players thereby commanding unjustified polymer prices in the domestic market as compared to international prices,” stated Sisir Jalan, secretary, IPF.
Polymer rates are 10-15% reduce in the international industry and Indian petrochem producers do not enter into forwarding contracts as overseas producers do.
Jalan alleged that domestic producers demand anti-dumping proceedings on choose grades of polymers in which they charge a premium. Indian raw material suppliers export in significant quantities and make scarcity resulting in an exponential rise in price tag in the final 5 months. This is coupled with a serious drop in demand due to the pandemic, which has down the line effected in a working capital crunch.
The increasing imports of completed plastic goods from China are also generating the Indian plastic business uncompetitive in the domestic industry and greater raw material rates are generating exports of completed plastic goods uncompetitive. “Unless polymer prices in India are brought at par with the international prices, survival of thousands of plastic processing units in India are at stake, IPF’s joint secretary,” Amit Agarwal stated.