Budget expectations for plastic and polymer industry

Plastindia Foundation president Jigish Doshi shares his budget wish list

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Jigish Doshi, president of the Plastindia Foundation. Photo Plastindia Foundation

The Plastindia Foundation, an apex body of major associations, organizations, and institutions connected with the plastics industry, has urged the government to lower import duty on polymers and increase custom duty on finished plastic products in Union Budget 2023-24 to support the domestic plastic industry.

Union finance minister Nirmala Sitharaman is all set to present the Union Budget for the financial year 2023-24 on 1 February.

The Plastindia Foundation has also urged the minister to frame the budget keeping in mind the overall growth and development of the entire plastic industry – from raw materials, and converter to machinery manufacturers.

“Plastindia Foundation’s motto is to put the Indian plastic industry on a high growth path – from US$ 5 trillion in 2025 to US$ 25 trillion by 2045. To drive this growth and to make India the global sourcing hub for plastic, Plastindia wholeheartedly supports the Make in India and Aatmanirbhar Bharat initiatives. However, we need support from the government to make this a reality,” Jigish Doshi, president of the Plastindia Foundation, said.

 The import duty on polymers, Doshi said, should be between 5 – 7.5 %. India does not produce enough polymers and import is inevitable, so import duty on polymers needs to be lowered to make the Indian plastic industry more competitive, he said, adding customs duty on finished plastic products should be a minimum of 20% or more to support the domestic plastic processing industry.

“The government is focusing on renewable energy, and this presents an opportunity for the plastic industry. However, at present 90% of the components for solar panels and windmills are imported and the products are only assembled in India. To encourage the local manufacturers, the custom duty on the import of components such as EVA, back sheet, metal frame, solar glass, etc., should be at least 20%. The plastic industry can play an important role in manufacturing EVA and back sheets,” Doshi said.

To promote industrialization in India, Doshi requested the minister to also make available uninterrupted power at less than Rs 5 per unit, adding India has a high electricity rate and power fluctuations are also very high. “This rate is at par with neighboring countries that make uninterrupted power available to industries at a low cost.”

Doshi batted for a free labor law but at the same time said the wages should not be so high that it makes the manufacturing industry globally uncompetitive. “Labor law should come under the purview of the Central government and wages across the country – in tier 1, tier 2, and tier 3 cities — should be uniform.”

Speaking on land acquisition, Doshi said the government should make land acquisition easy by identifying zones of land that are non-agricultural. Land from those zones should be made available easily without industries having to go through the formality of converting agricultural land to non-agricultural land, he said. “Also, the government should start a new formula wherein developed land should be made available to industries on long-term leases.  This will significantly lower the investment on land and make Indian industries globally competitive. Currently, the price of land is so high that project costs skyrocketed. China is using this formula for a very long time,”

Among other suggestions, the foundation said GST should not be higher than 12% across product categories, easy finance should be available at reasonable interest rates from both banks and NBFCs, and compliance should be kept minimum. “If there are any technical errors in following these compliances then it should be handled by a separate court and not be treated as criminal activity,” Doshi said.

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