“Rationalise duties, Support R&D, Promote Sustainability”
– Neeraj Garg, Co-Founder and Director, Horizon Performance Polyurethane, RYMBAL.
Rymbal, a chemical manufacturing company specializing in Polyurethane Systems, faces challenges like its peers due to the Indian chemical industry’s reliance on imported raw materials from countries like China, Japan, and Korea. To enhance competitiveness of Indian finished goods with imported finished goods, we suggest three key areas for government intervention. First, re-evaluating import duties is crucial; currently, the duties on raw materials are the same as on finished products, which makes domestic finished good manufacturing less competitive compared to cheaper imported finished items. Adjusting these taxes (taxing imported finished goods more than imported raw materials) could make Indian-made products more price-competitive. Second, the government should support research and development in the chemical sector by providing targeted funding, grants, and tax incentives. Establishing innovation hubs and fostering collaboration between industry, academia, and government will drive the development of new products and technologies, boosting global competitiveness. Finally, promoting sustainability through the adoption of eco-friendly chemicals and recycling initiatives can enhance India’s global reputation and industry visibility. Implementing engaging policies will improve the competitiveness of the Indian chemical sector on the world stage, where sustainability is most valued demand from the chemical sector.
“Promote Agriculture through R&D, reduce GST on plant protection chemicals and climate-resilient farming”
– SK Chaudhary, Founder Director, Safex Chemicals Ltd.
Given the increasing threat to crops because of adverse weather conditions arising from climate change, one looks forward to a robust rise in the R&D outlays so that both private and government institutes are motivated to develop climate-resistant crop varieties. The crop rotation system should also be incentivised, whereby more farmers are encouraged to adopt this strategy. Training and awareness programmes can be launched so the farming community realises the importance of rotating crops, which can help in conserving the water table, enhancing soil fertility and minimising erosion. The GST rate of 18% on plant protection chemicals must also be lowered to 12% at the least, although a minimal rate of 5% would be more beneficial for the agri sector and consumers at large as it will reduce cost to grow crops. Since climate change challenges are only growing by the day, we believe the budget should look at across-the-board measures that will help in combatting this. Therefore, the Finance Minister should focus on steps that promote climate-resilient farming practices and crop rotation to improve overall agri yields. Besides diversifying the income source of farmers, it will help the economy at large through the additional revenue generated.
“Incentivise green hydrogen and renewable energy”
– Dhiman Roy, CEO, GreenH Electrolysis Pvt. Ltd.
The Union Budget 2024 presents a vital opportunity for India to accelerate its transition to a green hydrogen economy. Here are some key points that I hope will be incorporated into the budget:
Incentivize Production
- Lowering GST on solar modules, wind turbines and electrolysers from the current rate of 5% could significantly help reduce project costs.
- Reducing customs duties on imported solar cells and modules, and key components of hydrogen electrolysers like stacks can help enhance economic feasibility of both solar projects and projects involving green hydrogen
Demand Creation
- Set mandatory targets for central and state government entities to procure green hydrogen for their operations.
- To kick start the process of transitioning to a hydrogen economy, it is imperative to regulate the mandatory blending of a certain percentage of green hydrogen in the fossil hydrogen and natural gas we consume.
- Offer subsidies and tax breaks to industries that switch to green hydrogen for their energy needs.
Other Key Aspects
- Simplify and rationalize the regulatory framework for green hydrogen production, storage, and transportation.
- Allocate funds for training programs to build a skilled workforce for the green hydrogen industry.
- By providing incentives for production, establishing mandatory usage targets for PSUs, encouraging blending as well as investing in infrastructure, and promoting research and development, we can unlock the full potential of this clean energy source and achieve our climate goals.
“Reduce tariff on imported raw materials and bring PLI in the chemical and petrochemical sector”
– Mihir V Shah, Executive Director, Vipul Organics Ltd
India aspires to be an export hub with the stated target of exports of goods and services worth $2 trillion by 2030. This can be made possible by reducing the tariffs on imports of raw materials and ensuring that the right building blocks are in place, especially for the manufacturing sector. In addition, putting stringent anti-dumping measures will ensure that the domestic manufacturers have a level playing field. We believe that the budget will ensure that the Government’s commitment to the manufacturing sector as a whole and chemicals sector in particular moves seamlessly. Today chemicals contribute around 7% to the GDP and India is the 6th largest producer of chemicals in the world. The chemical sector is estimated to grow to $300 bn by 2025 and $1 tn by 2040. We hope that the budget focuses on bringing PLI in the chemical and petrochemical sectors so as to propel growth, for both existing and greenfield facilities. In addition, development of quality infrastructure and chemical hubs with centralized waste and effluent treatment systems will bring India at par with the other manufacturing hubs. This will ensure that the sector continues to be an important participant in the India growth story.
“Accelerate measurs to promote Sustainability, Renewables Energy Storage and the bio-sector”
– Manish Dabkara, Chairman & MD of EKI Energy Services Ltd in reference to the upcoming union budget
We as an industry, expect a continuation of the work that this government has been doing on climate action, especially on policy side but at a faster pace. We also anticipate bold measures that reinforce India’s commitment to environmental sustainability and climate action. The Modi government has made significant strides with initiatives like the National Clean Air Programme, National Green Hydrogen Mission, and ambitious renewable energy targets. However, to accelerate progress, we expect the budget to prioritize investments in green infrastructure, including grid modernization and energy storage solutions beyond Lithium. Enhancing manufacturing subsidies for renewable energy, particularly solar and wind, will be crucial in maintaining momentum towards our 2030 and 2070 goals. Offshore wind is another important potential yet to be tapped commercially. Budgetary allocation should prioritise offshore wind connected green hydrogen facilities in coastal Tamil Nadu, Karnataka and Gujarat. Additionally, we look forward to robust support in the budget for emerging sectors like bioenergy and climate-smart agriculture, which hold untapped potential for reducing emissions and promoting rural development. Incentives, both financial and policy-wise, for nature-based solutions and ecosystem restoration projects will augment carbon sequestration and provide livelihood opportunities. The bio-fuel / bio-energy sectors’ development is stuck at the feedstock supply security; specific budgetary allocation in development of institution / mechanism in PPP model to address the long-term feedstock supply security have the potential to make it the fastest growing infrastructure sub-sector in India for coming decade. The introduction of innovative financial instruments, such as green bonds and climate risk insurance, is essential for mobilizing private sector investment and driving sustainable projects. Strengthening the Carbon Credit Trading Scheme (CCTS) with clear regulations, enhancing the CCTS offests demand in India, and robust verification mechanisms will also be vital in incentivizing emission reductions and attracting investments in clean technologies. Hand-holding with international QA/QC agencies like ICVCM & VCMI may bring in greater credibility for overseas investment interest in Indian offsets under CCTS. We hope the budget will foster a collaborative approach, encouraging public-private partnerships and international cooperation to accelerate India’s transition to a sustainable energy future.
