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Indian Petrochemical Producers Oppose India-Oman FTA Over Duty Reductions

Updated: Jan 08, 2024 03:31:59pm

Indian Petrochemical Producers Oppose India-Oman FTA Over Duty Reductions

New Delhi, Jan 8 (KNN) Indian petrochemical producers have opposed the India-Oman Free Trade Agreement (FTA) negotiations due to significant duty reductions on polypropylene and polyethylene that could be proposed in the agreement.

The domestic industry's argument revolves around Oman offering substantial raw material subsidies to its petrochemical product industry.

Granting duty concessions on these materials would be perceived as a double advantage for Omani firms, according to the contention.

As of now, both polypropylene and polyethylene, crucial raw materials for plastics, are subjected to a 7.5 per cent import tax (basic customs duty). In addition, there is an 18 per cent Integrated Goods and Services Tax (GST) imposed to compensate for the GST incurred by domestic products.

A government official mentioned that discussions are underway with stakeholders in both the private and public sectors regarding the issue, reported FE.

The user industry, primarily plastic manufacturers, asserts that reducing duties will stimulate the labour-intensive sector.

This is because the raw material cost constitutes approximately 60 per cent of the final goods in this industry.

Previously, an official had indicated that negotiations on the Comprehensive Economic Partnership Agreement could conclude soon, with the possibility of signing taking place by the end of January.

However, the agreement might face delays owing to opposition from the industry.

Two rounds of talks between India and Oman have already taken place since November. During these discussions, the text for most of the chapters or policy areas has been finalised, according to a senior official.

India may aim to secure expanded access to the Omani market, particularly for business services and computer and information services, commonly imported by Oman.

Additionally, negotiations might include discussions about obtaining priority visas for Indian professionals on short-term assignments in Oman.

(KNN Bureau)


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