FTA with GCC weighed stumbles upon petrochem tariffs

13-Jun-06

Petrochemical products and plastics are proving to be a stumbling block for a bilateral trade pact with the Gulf Cooperation Council (GCC), comprising six oil-rich members - Saudi Arabia, Kuwait, Oman, Qatar, Bahrain and the United Arab Emirates. Domestic players have come together to petition the commerce ministry, following demands from GCC members to cut the import tariff on petrochem products. The government, faced with domestic pressures on one hand, is at the same time looking at simpler visa rules for Indians, along with the promise of billions of dollars of investment in IT and manufacturing sectors into the country, iin return for lower import tariffs for some of the GCC products. The domestic petrochemical industry claims that its investments estimated at nearly Rs 50,000 crore would be affected, if India is permitted to lower duty imports, particularly since the Gulf region has access to cheaper gas as feedstock.