Industry Odisha Bureau, May 28: The ongoing deadlock owing to the unabated West Asia crisis has reportedly brought forth India’s too much dependence on the region for petrochemical imports as the utter disruptions in the supply chain of petrochemicals have reportedly been leaving Indian manufacturers high and dry in absence of adequate raw materials, coughing up extra cash for imports from alternative avenues, cuts in output, and above all, the smooth functioning of their enterprises being hit hard.
Reportedly, Indian plants and business establishments dealing in high-performance packaging films and foils, plastic packaging for fast-moving consumer goods (FMCG), firms supplying chemicals for textile, pharma, agriculture and cosmetics sectors have been bearing the brunt, and even bound down to down their shutters.
Surveys at the ground level initiated by analysts have revealed that, “capital requirements have doubled to import the requisite raw materials from other countries to keep the show of big companies going, while the small and medium-sized enterprises (SMEs) are unable to sustain for which they are bound down to down their shutters.”
It has also been revealed that the comparatively big shots are also bound down to borrow loan from banks for the double capital requirements.
The surveys have also revealed that “lots of chemical manufacturers and traders have been experiencing a decline in demand from their regular clients at the time of contract renegotiations.”
The surveys have also found out that the manufacturers of chemicals for food, pharma and nutraceutical industries are “reluctant to increase costs apprehending a break-up in the long-term business bond with the clients/customers despite having borne all the hikes in input and logistic costs due to the ongoing West Asia crisis.”
Analysts have also brought home the fact that, “China is at present the alternative source for importing the petrochemical raw materials into India, but at a much higher cost than the West Asia. China is in a much better position than India owing to its larger strategic oil reserves as well as a large coal to petrochemicals industry utilising its domestic coal.”
Drawing a comparison between China and India in this regard, the analysts claim that “India’s petrochemical industry is still at the mercy of crude oil imports from West Asia even though India being bestowed with abundant coal repository.”
Notwithstanding that, the Government of India has reportedly taken a welcome step by “exempting 40 critical petrochemical products from customs duty until June 30 in a bid to ease the burden.”
The Government of India has also reportedly approved an Emergency Credit Line Guarantee Scheme (ECGLS) recently for propping up the SMEs.
In addition, the Government of India has also reportedly approved “Rs 37,500 crore scheme for coal gasification to convert domestic coal into synthetic gas (syngas) so that such an initiative could lessen dependence on imported petrochemicals, liquefied natural gas (LNG), and fertilizers.”
