Union Budget 2020 to Favor Indian Chemical Manufacturers Through Revision in Custom Duties
- 03-Feb-2020 3:00 PM
- Journalist: Peter Schmidt
As per the Union Budget 2020-21 introduced by the Indian Government on February 2nd,2020, the Basic Customs Duty (BCD) on Butyl Acrylate (HS Code 29161210) will be increased from 5 per cent to 7.5 per cent. India is the leading importer of Chinese Butyl Acrylate in the world. However, the increase in Customs Duty (effective from February 1st, 2020) is unlikely to affect the China to India movement of Acrylate Esters in the short term. Improved penetration of Chinese Acrylate Ester in the Indian market which is further attributed to lackluster product demand in China’s domestic market, is making volumes of acrylate esters available to the export market. Union Budget 2020-21 also mandates custom duties on Crude Palm Oil (HS Code 15111000) to be raised from 37.5 % to 44%. The budget memorandum also proposed to increase the duty on Phosphoric Acid which currently stands at 5%. The removal of concessional custom duty on Phosphoric Acid would squeeze the margins of NPK fertilizer manufacturers who utilize the imported Phosphoric Acid. However, it will be a positive initiative for domestic companies like Coromandel and IFFCO which are into manufacturing of Phosphoric Acid.