Saudi warns India of action over high tax on polypropylene exports

Saudi Arabia yesterday threatened to take action against India, accusing it of imposing customs tariffs of up to 50 per cent on its polypropylene exports.

The warning came as the world's oil superpower has been locked in a similar rift with China over its plans to introduce tariffs on the kingdom's petrochemical exports with the aim of protecting its own products.

Quoted by Saudi newspapers yesterday, Abdul Rahman Al Zamil, Chief Executive of the country's Exports Development Centre, charged that Saudi Arabia's key economic partner, India, has imposed a tax of up to 50 per cent on its exports of polypropylene, a thermoplastic polymer used in a variety of applications, including packaging, textiles, stationery, plastic parts and reusable containers of various types.

"The centre is in the process of taking firm action against India over its behaviour against our products," he told the country's Arabic-language dailies.

"But we are not taking this action right now. We will open the India file once the file of our rift with China is closed. I urge all Saudi producers and exporters to present their complaints against China and India."

Zamil urged the Gulf partners of Saudi Arabia to take a unified stand against China over its sudden plan to introduce high customs tariffs on the kingdom's petrochemical exports.

"We urge that the GCC Secretariat must now include clear and frank articles in any free trade agreement [FTA] with China that it should not subject the Gulf petrochemical products to such measures," he said.

"It also must deal with such irrational Chinese moves and seek reassurances from Beijing in any FTA that it will not take any protection measures against our products. Otherwise, signing this agreement will be pointless because all GCC states will be losers and China will be the only winner."

India and China are major trading partners of Saudi Arabia and among the largest importers of its oil and petrochemical products.

China's exports to the kingdom peaked at about $13 billion (Dh47.75bn) in 2008 while India's exports stood at $4.28bn during the first four months of 2009, according to official figures.

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