The Hindu Business Line : Plastic cos to lobby against cheap imports

EVEN as the new Government at the Centre begins to take shape, the plastics lobby is planning to harness the enhanced strength of the Left MPs in the Lok Sabha to press for some of their pending issues.

According to sources, one of the first such issues that was proposed to be taken up with the Left parliamentarians was the import of plastics finished goods from Nepal.

Mr J.C. Agarwal, president of the Indian Plastics Federation, one of the oldest industry associations, admitted that the import of plastics finished goods was increasingly becoming a threat to Indian processors.

The main trigger behind this threat is the lower cost of production that Nepalese processors enjoy over their Indian counterparts due to the duty benefits enjoyed by them.

The States getting affected the most are those close to the Indo-Nepalese border, i.e., Bihar, West Bengal and Jharkhand in the eastern region. Gujarat and Uttar Pradesh are the other States where the plastics processing industry is taking a beating.

As per the Indo-Nepal Treaty, no import duty is imposed on plastics when Nepal imports raw materials for manufacturing the products for exports. As per estimates made by plastics industry, of the annual polymer processing capacity of 70,000 per annum in Nepal, over 45,000 tonnes is exported to India.

The plastics sectors that are worst hit are carry bags, linear low-density polyethylene pipes (used by the agriculturally advanced northern States), woven fabric and furniture.

In these segments over 70 per cent of the produce is exported to India.

Substantial capacity addition is being planned by the Nepalese processors and the domestic plastics industry fears that majority of this capacity would be used for flooding the Indian market.

The industry wants the support of Left parliamentarians to protect the units in the State. They feel that this could be done through imposition of quantity restriction on Nepalese imports, besides routing all imports from Nepal through the State Trading Corporation.

At the State level, they feel that a high rate of sales tax could be imposed on plastics imports from the Himalayan kingdom, on the lines done for the vegetable ghee industry in West Bengal, which faced a similar competition.

A 20 per cent sales tax was imposed on Nepalese imports to check the influx, sources said.

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