Govt To Consider PLI Scheme For Chemicals And Petrochemicals, Says Union Finance Minister

India’s Finance Minister on Thursday said that the central government is considering rolling out a product-linked incentive (PLI) scheme for the chemicals and the petrochemicals sector.

"We will consider a product-linked incentive scheme for chemicals and petrochemicals. India 2047 aims to become energy independent and net zero carbon emission by 2070," Nirmala Sitharaman said in  'Global Chemicals and Petrochemicals Manufacturing Hubs in India' summit organised by industry body FICCI.

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According to reports, India is expected to achieve energy independence by adding more than 500 GW of non-fossil generation capacity.

The central government has also announced 14 PLI schemes for sectors including telecommunication, electronics, white goods, textiles and pharma.  According to Sitharaman, the sector's significance can be measured by its production of 80,000 products, which directly impact many sectors of the economy including construction, packaging, textile and agriculture.

India’s combined exports in 2022-23 (till september 2022) in chemicals and petrochemicals were at $9 billion, which was 2% higher than the year ago. Whereas, imports in this sector have risen to $33.33 billion.

She further went on to say that the inverted duty structure under Goods and Services Tax (GST) may be hurting some in the chemicals and petrochemicals sector but correcting an inversion on an item may have collateral on some other line.

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An inverted duty structure is when the GST rate on input products is higher than the final good.

India’s contribution to specialty chemicals is at $32 billion. Sitharaman also added that the world is looking for an alternative country for manufacturing in this sector and India has good chances to become the manufacturing hub.

"Industry first must look at sustainability with the rapid shift to such technologies. Sustainability of products and processes is an important challenge for the chemicals and petrochemicals sector. Industry 4.0 needs to be adopted rapidly by them including a focus on skilling," she said.