Petrochem Companies in Iran Struggle Against India Restrictions
Iran is having a hard time raising its footprint in India's petrochemical market as it faces stiff competition from Saudi Arabia and restraining trade regulations by the New Delhi government, a member of the board of Tehran Chamber of Commerce, Industries, Mines and Agriculture said.
"In India, anti-dumping rules against Iranian petrochemicals are still in place, but these restrictions have been removed for Saudi export companies," Hamed Vahedi told state agency IRNA on Saturday. "We have been communicating and making concerted efforts to remove the anti-dumping barriers in India," he said without elaboration.
The Saudis "have lobbied" for easing and expanding their petrochemical sales to India in a bid to squeeze Iran in the petrochemical market of the world's fastest-growing economy. India consumes around 6.2 million tons of polymers, which represents approximately 3% of global consumption of 200 million tons. To meet the surging demand, the country's petrochemical industry is preparing to spend more than $25 billion annually, according to the Associated Chambers of Commerce and Industry of India.
Dumping, in reference to international trade, is the export by a country or company of a product at a price that is lower in the foreign market than the price charged in the domestic market. The primary advantage of trade dumping is the ability to permeate the market with product prices often seen as unfair.
According to Vahedi, Russia, Saudi Arabia and Iran are the top petrochemical exporters to India, but Iran is the only country that faces anti-dumping regulations. Iran reportedly exported 5.7 million tons of non-oil goods worth $1.9 billion to India during the eight months ending November 20. The exports included gas condensates and petrochemicals.
Data shows that the international sanctions took a toll on Iran's petrochemical industry. Iran exported around $15 billion worth of petrochemicals in 2011, before the US and the EU introduced tougher economic and banking sanctions.
Petrochemical exports in the previous Iranian fiscal year that ended in March 2016 reached $9.6 billion. The country is forecast to post lower revenues from petrochemical exports in the current fiscal despite an uptick in production. The lifting of international sanctions in January of last year, however, has given the oil- and gas-rich country a fresh impetus to open up its energy market to foreign investment and expand the exports of petrochemicals. Officials say the fast emerging petrochemical industry needs $72 billion in foreign investment for 80 major projects. Annual petrochemical production capacity is around 65 million tons a year, but plans call for boosting the capacity to 130 million tons per annum by 2020 before reaching 180 million tons by 2025.