NEW DELHI: The government on Thursday announced full customs duty exemption on a range of critical petrochemical products till June 30, 2026, to ensure supply stability and shield domestic industry and consumers from the impact of disruptions caused by the ongoing West Asia conflict.
In a statement, the Finance Ministry said the move was a temporary and targeted relief measure aimed at ensuring continued availability of key petrochemical inputs, reducing cost pressures on downstream sectors and safeguarding supply chains amid global volatility.
The exemption comes in the backdrop of disruptions in shipping routes and supply chains due to the conflict in West Asia, which has raised concerns over imports of fertilisers, crude oil and natural gas. India is a major importer of both fertilisers and petroleum products.
The duty waiver is expected to benefit a wide range of sectors dependent on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, electronics and construction materials.
Sectors such as textiles, packaging, and pharmaceuticals, which rely heavily on intermediates like Purified Terephthalic Acid (PTA), Methanol, and Acetic acid, will see immediate relief in their production costs.
The exemption covers key products including methanol, anhydrous ammonia, toluene, styrene, dichloromethane (methylene chloride), vinyl chloride monomer, polybutadiene, styrene-butadiene and unsaturated polyester resins.
Similarly, the automotive and electronics industries stand to benefit from duty-free imports of high-grade polymers and resins, including Polycarbonates, ABS, and specialized polyurethanes. Even the construction and consumer goods markets are shielded, as the exemption covers bulk plastics like PVC and Polypropylene.
Officials said the measure is designed to act as a buffer against rising global commodity prices by keeping essential raw materials accessible and affordable, thereby protecting manufacturers from margin pressures while helping contain inflation for consumers of final products.
Global crude prices have surged nearly 50% since February 28, when the United States and Israel launched military strikes against Iran, triggering retaliation from Tehran and escalating tensions in the region.
As part of its broader response to rising energy prices, the government had last week cut excise duty on petrol and diesel by Rs 10 per litre, bringing excise duty on petrol down to Rs 3 per litre and on diesel to zero. It also imposed export duties of Rs 21.50 per litre on diesel and Rs 29.50 per litre on aviation turbine fuel (ATF) to stabilise domestic supply.