Senior Union minister Nitin Gadkari blamed higher crude imports for the present macroeconomic crisis and called for reducing overall imports and increasing exports to tide it over.
Crude prices, coupled with the steep fall in the rupee has strained the balance of payment position and the resultant spike in the current account deficit, which is slated to top 2.9 per cent of GDP this fiscal year. The country is not only the third biggest consumer of oil but also the third largest importer with 81 per cent of consumption being met through imports.
Crossing USD 85 barrel, Brent is trading at a four year high having rallied nearly 35 per cent since this year, while the rupee hit a new lifetime low of 73.81 to a dollar. Blaming crude imports for the present economic crisis, Gadkari said, “the present economic situation is primarily due to higher imports, particularly of crude oil.”
Inaugurating the IndiaChem expo organised by Ficci here Gadkari called for finding out fuel import substitutes in ethanol, methanol, CNG and electric transportation system for which we have great potential.
“We are ahead in innovation, entrepreneurship, technology, research and development. There is a huge potential in our petrochemical sector as well, but we need import substitutes, pollution-free, cost-effective and indigenous ways to go ahead,” he added.
While blaming oil cartel Opec for the current increase in crude prices, he said, “one day they will find that there is no market for their crude.”
The minister also said government has decided to increase production of ethanol as this is important. “As this is the time for us to find solutions for import substitutes, the chemical industry must work towards finding the solutions to curb imports of crude at higher prices,” he said.
The minister also announced plans to start a pilot project in Mumbai, Navi Mumbai, Pune and Guwahati to run electric buses on methanol derived from coal.
Noting that the country has the technology to produce ethanol from agri waste, he asked the chemical industry to check whether agriculture materials/waste can be used to make chemicals as well.
Globally, chemical industry was estimated at USD 4.7 trillion in 2017 while the domestic industry was estimated at USD 163 billion or just 3.4 per cent of the global industry.
P Raghavendra Rao, chemicals and petrochemicals secretary, said it is the right time to invest in the domestic chemical and petrochemical industry as it offers vast opportunities, especially in speciality chemicals, pharma and biotech.
In the last seven years, production of total major chemicals and petrochemicals has grown 6.2 per cent and is projected to grow by 9.3 per cent by FY25, added.