Petrochem industry fears unfair competitive advantage in FTA with the Gulf

Fearing unfair competitive advantage, a leading industry body has urged the government to keep key petrochemical products like ethylene and linear low-density polyethylene (LLDPE) outside the purview of the proposed free trade agreement with the Gulf Cooperation Council (GCC). GCC is a customs union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). As a bloc, GCC is India's third largest trading partner after the European Union and the US. Indian manufacturers are at a disadvantage because key inputs like feedstock are available in GCC countries at subsidised rates, as per a statement by Associated Chambers of Commerce and Industry of India (Assocham). The governments in the GCC provide natural gas to their petrochemical industry for using as feedstock at a subsidised price of $0.75 per mln British thermal unit (MMBTU), while prevailing prices in the international market are in the range of US$15 per MMBTU. This leads to a significant difference in the average production cost of these petrochemicals in India and GCC countries - Production cost of ethylene in India works out to US$697 per metric ton as compared to just US$143 per MT in Saudi Arabia. This amply demonstrates that Indian ethylene manufacturers are at a 281% cost disadvantage vis-a-vis their Saudi counterparts. Manufacturers of low-density polyethylene (LDPE), high-density polyethylene (HDPE) and polypropylene (PP) also face similar cost disadvantage with respect to their counterparts in GCC countries.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha