The Centre has outlines a strategy aimed at achieving 'self-reliance' in the chemical and petrochemical sectors, in line with its call for an 'Atmanirbhar Bharat'. As per the latest proposal, investments in greenfield as well as brownfield projects in the aforementioned sectors will receive certain tax incentives, sources told CNBC Awaaz.
The tax incentive slabs are likely to be as follows: zero corporate tax for the first five years, 75 percent rebate in corporate tax for the next five years, and 50 percent waiver in five years after the first decade. A 10 percent to 20 percent equity capital from the government is also likely.
The government is also looking to amend the Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) policy to provide more such incentives and relaxations, the report stated.
This proposal has reportedly been finalised by the Ministry of Chemicals and Fertilisers and will be implemented after it received the Cabinet nod.
Chemicals and petrochemicals are among India's top five import items, bulk of which the country gets from China. The Centre is also planning
to hike duties on imports from China and is in the process of identifying the ones on which dutty would be hiked. The combination of the revised duy structure and a lower tax rate for investments in the sector would help reduce India's dependence on Chinese imports.