The Hindu Business Line : Bilateral trade treaties posing threat to vanaspati, plastic industries

THE recent bilateral trade treaties by India with neighbouring Nepal and Bhutan have posed a serious threat to industries such as vanaspati and plastics in the eastern region, particularly West Bengal.

Unless corrective measures are taken by the Centre, these industries may be priced out of the market, fears the Merchants' Chamber of Commerce (MCC).

Under the treaty, Nepal can export vanaspati duty-free to West Bengal and any other part of the country. Moreover, Nepal does not pay any import duty on crude palm oil. As a result, Nepal can sell vanaspati at Rs 37 per kg. Local manufacturers have to pay 65 per cent duty on import of crude palm oil and also follow the restriction of using a minimum quantity of indigenous edible oil. These factors raise production cost to Rs 47 per cent kg.

In such a scenario, MCC feels that the local vanaspati industry needs at least a level-playing field, which can be provided by the State Government through a levy of sales tax at 20 per cent on vanaspati coming from Nepal.

In the case of plastics industry, Nepalese processors enjoy cost benefits and also the facility to undercut prices. MCC has suggested that all imports of plastic products should be routed through a single body such as the State Trading Corporation in order to prevent under-invoicing and multiple use of the Way Bills.

Addressing the MCC members, Mr Somnath Chatterjee, MP and Chairman of West Bengal Industrial Development Corporation, said here on Friday that he would take up the matter with the Union Ministries concerned.

He, however, advised local chambers of commerce and trade associations to unite and fight against the Indo-Nepal trade treaties.

Inviting private sector's participation to re-open sick and closed industries in the State, Mr Chatterjee said that although the State's investment climate was encouraging, the apex chambers of commerce and industries such FICCI, Assocham and CII in New Delhi, were not supportive enough to help West Bengal develop as a future destination for fresh investment.

He said that PepsiCo had firmed an investment plan to set up a food-processing unit. About 54 acres of land at Sankrail near the city had been allotted for this purpose. This apart, about 300 acres of land had been allotted to the city-based Emami group for cultivation of medicinal plants, he added.

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