Import Duty Reduction may Cost Burden on PVC Manufacturers

Domestic manufacturers of polyvinyl chloride (PVC) seek the import duty untouched on the material in the upcoming budget. They fear that reducing import duty by the government may hamper planned domestic capacity addition.

According to the president of Chemicals and Petrochemicals Manufacturers’ Association (CPMA), Kamal Nanavaty, “the capacity additions were planned in response to duty increases and now if the government were to bring it down, it will put to risk new capacity.”

As Duty on the import of PVC has been doubled in the past few years to 10%, which encouraged new investment commitment by domestic players. “In India, industries have to bear a higher cost of capital and infra and so the loss of duty protection would put them at a disadvantage to foreign players,” said Nanavaty.

Further, Nanavaty added, with 500,000 tonnes per year of supplies, Japan is currently the biggest PVC exporter to India. A sharp rise in Japanese exports has been aided by the free trade agreement between India and Japan, which gradually brought down duties to nil.

PVC is plastic which is utilised in several industries including farms, buildings, construction and healthcare. Whereas, India produces about 1.5 million tonnes a year of PVC, which helps meet less than half of the country’s total consumption of about 3.2 million tonnes, as per Nanavaty.


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