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Talks to conclude the India-Oman free trade agreement may be delayed as Indian petrochemical producers have opposed any deep duty cuts on polypropylene and polyethylene, according to an Indian media report.
Polypropylene and polyethylene, the key raw materials for plastics, attract an import tax of 7.5% in addition to an 18% integrated goods and services tax in India, Financial Express, an Indian financial daily, reported.
The Indian industry believes that Oman provides a “large” raw material subsidy to its petrochemical product industry and duty concessions on these will be a double advantage for Omani firms.
Therefore, the government is holding talks with domestic players in the private and public sectors on the issue, the newspaper said, citing an unnamed government official.
Reliance Industries is the biggest producer of polypropylene in India and state-owned Haldia Petrochemicals is the largest producer of polyethylene, the report said.
Of the total imports from Oman of $7.5 billion last year, polypropylene and ethylene polymers accounted for $383 million.
An official had earlier anticipated signing the Comprehensive Economic Partnership Agreement (CEPA) by January-end.
(Editing by Brinda Darasha; brinda.darasha@lseg.com)