Kolkata, Mar 1 (UNI) Reimposition of five per cent import duty on naptha in the Union Budget proposal dealt a major blow to petrochemicals industries in the country, particularly Haldia Petrochemicals Limited (HPL), company sources here said.
The West Bengal Government has major shareholding in the HPL.
Finance Minister P Chidambaram's annoucement of reimpsoing import duty of naptha was a reversal of reduction, given two years back, when it was brought down to zero from five per cent as well as the import duty on polymers, also brought down to five per cent, the sources added.
''The new proposal is a major setback to Haldia Petrochemicals, where the West Bengal Government has major shareholdings,'' the sources stated.
HPL is the only petrochemical unit, which needs to necessarily import naptha, as other petrochemical producers in the country are either gas based or produce naphtha in their own refineries.
Now import duty on its raw material and product was the same and hence the duty differential stood totally withdrawn.
Sources said the re-imposition of import duty on naphtha will be a crushing blow to the development of Petrochemical Industries in India as import duty in major petrochemical-producing countries in South East Asia and China was nil.
HPL's sole raw material naptha has already seen 36 per cent price rise in this year due to spurt in global prices. This will have a major adverse impact on the bottomline, sources said.
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