Government plans to set up SEZ abroad for chemicals

According to a report in Business Standard, the Department of Chemicals and Petrochemicals, under the Ministry of Chemicals & Fertilizers, is mulling over a proposal to set up chemical and petrochemical complex in overseas countries having easy access to feedstock to ensure the availability of primary chemical raw materials exclusively for the Indian companies. The proposed feedstock complex is expected to come up in a special economic zone to be set up by Indian government in these countries.
 
The report adds that the government has identified Iran and Myanmar for this purpose and is planning to start the dialogue for setting up such chemical feedstock complexes. This will be a win-win deal for India and these two countries. While India can gain access to critical hydrocarbon feedstocks, Iran and Myanmar will witness investment in refinery by Indian companies.
 
The choice of countries also makes sense since most of the leading global petrochemical giants have stayed away or have restricted their investments in Iran and Myanmar, in spite of having access to hydrocarbon resources, due to political turmoil in these two countries. On the other hand, India had to depend on Gulf countries for the requirement of crude oil, a key starting point for downstream industry.
 
Though India is one of the leading manufacturers of chemicals in the world, per capita consumption of chemicals in the country compared to developed and other emerging markets is very low. Also, India is a net importer of chemicals. And one of the key reasons for this is high input costs, since these have to be imported either as feedsocks or crude.
 
If the government is able to push through this plan and establish manufacturing plants for chemical raw materials, it will benefit Indian chemical companies.
 
Also, there are reports that Iran has evinced in interest to invest in the PCPIRs (Petroleum, Chemicals and Petrochemicals Investment Regions) zone in Andhra Pradesh, in which Hindustan Petroleum Corporation (HPCL) is setting up an anchor refinery.
 
The special delineated investments in PCPIRs (Petroleum, Chemicals and Petrochemicals Investment Regions) have been set up in in Dahej (Gujarat), Visakhapatnam and Kakinada (Andhra Pradesh), Paradip (Odisha), and Cuddalore and Nagapattinam (Tamil Nadu).
 
Further, the ministry is also planning to constitute four steering committees with representation from other ministries like Finance, Petroleum, Railways, Urban Development and Transport. These committees will boost investments in the four approved PCPIR regions - Dahej (Gujarat), Visakhapatnam and Kakinada (Andhra Pradesh), Paradip (Odisha), and Cuddalore and Nagapattinam (Tamil Nadu) - to the tune of Rs 7.2 lakh-crore in which the government has invested Rs 1.47 lakh crore so far.
 
The Department of Chemicals and Petrochemicals is also working on the final draft of the National Chemical Policy, which was announced in 2012. In fact, Ananth Kumar, Minister of Chemicals & Fertilizers, while answering one of the questions in the Parliament recently, had said that the Government will bring out the National Chemical Policy soon.
 
For Complete Report Read: Govt to set up SEZ for chemical, petrochemical feedstock complex abroad