New Delhi, July 11: Domestic petrochemical manufacturers are upset at Foreign Investment Promotion Board's (FIPB) clearance to a foreign company's subsidiary to import and sell petrochemicals and plastics in the country. They are particularly peeved because the department of chemicals and petrochemicals had opposed the move.

Sabic Marketing Europe Ltd's Indian subsidiary, Sabic Marketing India's case has also brought to fore differences between various central ministries on policy issues.

While the department of chemicals and petrochemicals -- the administrative ministry in Sabic's case -- opposed the proposal, it was cleared by the commerce ministry and subsequently approved by FIPB.

The commerce ministry favoured clearance of the proposal on the grounds that the import should be done as per the provisions of export-import policy. The ministry also argued that the products were under the open general licence (OGL) and freely importable.

On the other hand, the department of chemicals and petrochemicals said that it favoured the rejection of the proposal since the company was interested in only trading.

However, the Foreign Investment Promotion Board said in its decision that objections raised by the department of petrochemicals and chemicals was not sustainable as there was no policy laid down by the government restricting trading in petrochemicals and plastic by foreign joint ventures.

Interestingly, import of petrochemicals and plastic was not a part of the original application made by the company. Sabic was first granted approval by the FIPB for setting up a joint venture for consultancy services for technicals, marketing and project development, identifying joint ventures, facilitating technology transfer arrangements, promotion of exports and counter trade.

The company subsequently sought amendment to clause (ii) of its approval letter to add the new business activity of importing petrochemicals and plastics.

Import of petrochemicals and plastics has been a controversial issue for quite some time. Domestic manufactures led by Reliance Industries have been alleging large scale under-invoicing of such products by the importers.In fact, the directorate of revenue intelligence (DRI) initiated a probe last month against a number of importers for alleged under-invoicing. Import consignments of a number of importers were also seized by the customs authorities at Kandla port last month.