India Exempts 40 Petrochem Products From Custom Duty Till June Amid West Asia Crisis

(MENAFN- KNN India) New Delhi, Apr 2 (KNN) In a targeted relief measure, the Government of India has announced a full customs duty exemption on dozens of critical petrochemical products till June 2026 to mitigate the impact of supply disruptions arising from the ongoing West Asia conflict.

The decision, issued under provisions of the Customs Act 1962, aims to ensure the availability of key industrial inputs, ease cost pressures, and stabilise domestic supply chains.

Wide Coverage of Petrochemical Products

As per the notification by the Ministry of Finance, the exemption, effective from April 2 to June 30, 2026, covers over 40 petrochemical products and polymers, now attracting nil customs duty.

Key products include feedstocks and chemicals: toluene, styrene, methanol, VCM, phenol, acetic acid, PTA, MEG; polymers: polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polystyrene (PS); engineering plastics: ABS, SAN, polycarbonate, POM.

The move also includes relief from the Agriculture Infrastructure and Development Cess under the Finance Act 2021.

Relief for Multiple Sectors

The exemption is expected to benefit a wide range of industries dependent on petrochemical feedstock, including plastics and packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing sectors.

By lowering input costs, the measure is also likely to provide indirect relief to consumers through moderated prices of finished goods.

Addressing Supply Chain Disruptions

The government stated that the temporary exemption has been introduced in response to global supply chain disruptions and rising input costs triggered by geopolitical tensions in West Asia.

India's heavy reliance on imported petrochemical intermediates has made domestic industries vulnerable to volatility in global markets, particularly amid rising crude oil prices and logistical challenges.

Federation of Indian Micro, Small and Medium Enterprises (FISME) President Rakesh Chhabra thanked the government for the move, and expressed hope that it would help reduce raw material prices.

He said that certain PVC products remain on the negative list and are subject to anti-dumping duties, leading manufacturers to significantly raise prices. "The government should consider temporarily removing these duties as well to bring prices down," Chhabra said. He added that this measure would help maintain our GDP growth.

Short-Term Stabilisation Measure

The exemption is positioned as a temporary and targeted intervention to support industry during a period of heightened uncertainty, ensure uninterrupted production, and prevent cost escalation across downstream sectors.

The move is expected to support MSMEs and manufacturing units, particularly those facing margin pressures due to rising raw material costs, while helping maintain price stability in key consumer and industrial segments.

(KNN Bureau)

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