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Centre to Announce Revised Chemical Policy

During a recent chemical industry conclave, Ajay Vara Prasad, Joint Secretary Department of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers, Govt. of India, informed that the Centre is revising current policy and will shortly announce the same which would address the key aspects viz. imports, exports, patents, research & development.
The Government has underscored the importance of the chemical industry during the 12th Five Year Plan and come up with the National Chemical Policy which aims at increasing the chemical industry from its current size of USD 108 billion to USD 224 billion by 2017 and increase its share in country s manufacturing pie from current 16 per cent to 25 per cent. Presently, there are around 70,000 chemical units, 80 per cent of which are small scale and provide employment to approximately 3.3 million.
Prasad also stated that share of chemical industry in country s GDP has dropped to 1.9 per cent from highs of 2-3 per cent, and he expects the industry to still grow at 11 per cent after touching the peak growth levels of 15 per cent during the recent past. However, the biggest issue would be taking production levels to the order of Rs 3 lakh crore, he added.
Lack of conducive policies and infrastructure are major barriers in the growth of chemical industry. He is extremely optimistic about the amendments that are being made to the National Chemical Policy and said that once approved by the Government, the policy will open multitude of avenues for growth of Indian chemical industry and the new set of reforms would catapult the growth of Indian chemical industry.
Vipul Shah, President, CEO & Chairman, Dow India, states, "I firmly believe that if we tread the right path, the Indian chemical industry has a potential to grow at 11 per cent annually, even in this challenging economic environment. Being 3 per cent of the global chemicals business, it can clock an estimated turnover of USD 224 billion by 2017." He said, "My key expectations from the forthcoming chemical policy is the right push to reform the agenda in the sector and fast track setting up of chemical parks to attract investments."
Shah emphasises, "This would help efficiently meet the demand, rapidly grow the domestic market and generate significant employment." This, coupled with 'zero duty' on the import of chemicals to facilitate easy availability at competitive cost; roll out of GST and a complete waiver of Special Additional Duty (SAD) would provide the much needed fillip to the chemical sector, he adds.
Shah stresses on the urgent need to provide for steps to boost R&D by formation of sophisticated R&D facilities with internationally recognized accreditation. Further, extension of income tax exemption under Section 35 of Income Tax Act on the initial investment for setting up of R&D facilities and extension of customs duty exemption on import of R&D equipment for the chemical sector could be some initial welcome steps in these difficult times, Shah adds.
Emphasising on the need of new reforms to boost the growth of chemical industry, R Mukundan, Managing Director, Tata Chemicals, says, "The chemical sector's GDP contribution has reduced from present 2-3 per cent to 1.9 per cent and needs urgent policy push for growth. The required new policy should leverage the country's existing infrastructure and competencies, ensure availability of feedstock, foster a strong R&D base, and recognise incorporation of Indian IPR in global standards while promoting entrepreneurship, innovation and special focus on exports. It should be focused on 'green technology' to combat the negative connotations attached with the industry."