BUDGET EXPECTATIONS: CHEMICAL

16 Jan 2023 , 02:59 PM

ICRA notes that the chemical sector is a critical manufacturing sector with high potential for increased domestic production as well as exports and meets the Government’s Atmanirbhar Bharat policy. Further, global factors, like the China+1 strategy and European energy crisis, will also support export growth in the sector, apart from expected domestic demand growth.

In recent years, the Government has taken several measures, including the rationalisation of duty structures under FTAs and trade protection measures in the form of anti-dumping duties etc. to leverage opportunities in the sector. However, there is scope for further duty rationalisation of raw material/intermediates and finished products. Further, support for feedstock capacity additions through incentives like PLI or other incentives/subsidies for infrastructure development may be needed. Specific schemes/budgetary support for MSME players in the chemical sector may also help such companies scale up their operations and move up the value chain.