Gowda promises solutions for chemical industry

Gowda promises solutions for chemical industry

Union Chemicals and Fertiliser Minister D V Sadananda Gowda. (DH File Photo)

Union Chemicals and Fertiliser Minister D V Sadananda Gowda on Tuesday assured the chemical industry that the Ministry would address their concern over the delay in getting green clearances and in restoring tax incentive for research and development (R&D) after taking feedback from experts and stakeholders.

Addressing a Confederation of Indian Industry (CII)-organised event, the minister said that the government has taken necessary measures to resolve the challenges and set up a Development Council and Advisory Forum for the chemical and petrochemical sector.

Earlier, the industry demanded the minister to take steps to ensure early green clearances to the chemical industries and restore the tax incentives for spending money on R&D. They also said that though the government had earlier introduced tax incentives to industries based on money spent on R&D, it was withdrawn subsequently. He also said the foreign direct investment (FDI) in India’s chemicals sector is “meagre” at only 9 per cent of the total inflow in the country in spite of a conducive policy and asked the industry players to introspect the reasons for the same.

He also asked the industry to suggest if policy interventions are required to boost the growth of the sector which has the potential to reach from the current $ 163 billion to $ 304 billion by 2025.

“In the chemical sector, 100 per cent FDI is permissible under the automatic route. The FDI inflow in this sector is only 9 per cent of the total inflow in the country, which is very meagre in spite of conducive industrial policy,” Gowda said.

The R&D spending needs to be enhanced from the present 2-3 per cent to 5-8 per cent of the revenue in line with overseas companies, he said, adding that sustainable development should a prerequisite for long-term development of the sector.