Raw material prices remain high despite Customs Duty exemption

For the plastic manufacturers and the manmade fibre textile sector, the Customs Duty exemption on 40 petro chemical products has not given any relief in raw material prices.

“With the Customs Duty exemption for PTA and MEG, which are the main raw materials for the MMF textile sector, the yarn prices should have reduced at least 5 %. But, it has not happened,” said former president of the Southern Gujarat Chamber of Commerce and Industry Ashish Gujarati. The MMF stakeholders had a meeting with the Textile Commissioner in this regard and have reiterated their demand for reduction of raw material prices, he said.

According to Anil Reddy Vennam, senior vice president of the All India Plastic Manufacturers Association, the raw material prices went up 65 % in the first 15 days of the US, Israel, Iran war. The latest was on April 2 though the government announced waiver of Customs Duty on 40 petro chemical products. The raw material prices for the plastic industry has seen ₹86 a kg hike since the war started. This is leading to hike in prices of various plastic products, including shampoo sachets and biscuit covers. Even the public sector undertakings that supply the raw materials are increasing the prices, he said.

Almost 90 % of the Indian plastic manufacturers in the MSME sector and 50,000-75,000 industries in the organised sector. Though many of them are negotiating with international suppliers of raw materials they are reluctant to finalise contracts because the delivery will take more than a month and there is no certainty on what the prices will be at that point of time. Currently, Indian raw material prices are more than the international prices for the plastics sector. This has impacted production severely, he said.