The government on Tuesday extended the full Customs duty exemption on imports of critical petrochemical products by another 15 days, until July 15, 2026, to ensure uninterrupted supplies to domestic industries as global supply chains continue to recover from disruptions caused by the conflict in West Asia.
The exemption, which was earlier scheduled to end on June 30, was introduced as a temporary relief measure after Indian petroleum companies were asked to prioritise LPG production to ensure adequate domestic availability. The measure was aimed at preventing any disruption in supply of key petrochemical products used by downstream industries.
According to the government, while the supply situation is gradually returning to normal, the short extension has been granted to ensure a smooth transition for industries dependent on these raw materials. The government said the extension would benefit several manufacturing sectors that rely on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals and automotive components.
The exemption will continue to apply to the same list of products notified earlier. These include key chemicals such as anhydrous ammonia, methanol, toluene, styrene, phenol, acetic acid, monoethylene glycol (MEG), purified terephthalic acid (PTA), vinyl chloride monomer, isopropyl alcohol and ammonium nitrate. It also covers a wide range of polymers and plastics, including polyethylene, polypropylene, polystyrene, PVC, PET chips, polycarbonate, epoxy resins, polyurethane, ABS, SAN, polyols, PEEK, polyvinyl alcohol, polyvinyl acetate, polyoxymethylene (POM), polybutadiene and styrene-butadiene rubber.
Earlier, pharmaceutical exporters were demanding Customs duty exemption on critical petrochemical inputs to extend beyond the deadline of June 30.
The government had introduced a full customs duty exemption on critical petrochemical inputs ammonia, isopropyl alcohol, methanol, acetic acid, phenol valid until June 30.
“Duties on select raw materials were also reduced to help manufacturers offset rising freight and insurance expenses. The government is reviewing the situation daily and has indicated these measures may be extended beyond June 30 if the situation warrants,” said Namit Joshi, chairman, Pharmaceuticals Export Promotion Council of India (Pharmexcil).
With the West Asia crisis disrupting the supply chain both export volumes and the cost of inputs were impacted. Prices of key APIs including azithromycin, potassium clavulanate, ibuprofen, paracetamol, and major vitamins were under considerable pressure, as petrochemical-based solvents, ammonia, methanol, and propylene - all critical raw materials - saw supply disruptions.