The Indian Chemical Council (ICC) has suggested zero import duty for feedstocks like naphtha and hydrocarbons and also chemical items like ethanol, coal and catalysts.
"For the Indian chemical industry to be competitive, there is an imperative need for feedstocks and fuels to be available at international prices. We therefore request for zero import duty on naphtha and hydrocarbons like ethane and propane which are feedstocks for manufacture of a wide range of organic chemicals and which currently attract import duty of 5 percent ad valorem," the ICC said in its pre-budget memorandum for 2011-12 to the Department of Chemicals and Petrochemicals (DCPC).

Terming ethanol as an important feedstock for the Indian chemical industry, the ICC said there is a significant deficit in the production of it in the country.

"At present, this basic input attracts import duty of 7.5 per cent ad valorem. We request that the government levy zero import duty on this basic input," it said in its letter.

The ICC also called for zero duty on coal and LNG.

"Coal is a major source of energy for the Indian chemical industry. In line with our request for fuels to be made available to the Indian industry at international prices, we request the import duty on coal to be reduced from 5 per cent ad valorem to zero.

"Similarly, LNG is becoming increasingly important as an energy source. LNG currently attracts import duty of 5 per cent ad valorem which may be reduced to zero," it suggested.

On other fuels, the ICC said, ?While ideally all fuels need to be made available to the Indian industry at international prices and should ideally be eligible for import at zero duty, we request at least for roll back of duty to 5 per cent ad valorem.?

It said that catalysts are an important input for manufacture of chemicals and decide the efficiency and cost of manufacture of chemicals produced in India.

"Certain catalysts like nickel or nickel compounds and palladium and others attract import duty of 7.5 per cent, which may be reduced to zero."

Besides these, ICC also wanted the government to fix the import duty on paraxylene at 5 per cent ad valorem and reduction on duty on olefins from 5 to 2.5 per cent.

Further, the ICC suggested that capital goods be made duty free or the import duty on capital goods be brought down to a level not more than 5 per cent ad valorem.