Critical Petrochemical Products Exempted From Import Duty

New Delhi: The Centre on Thursday exempted import of critical petrochemical products from customs duty for three months till June 30. The government, however, aims to give a huge relief to sectors such as pharmaceuticals, chemicals and textiles, among others, and ensure supply stability amid the ongoing West Asia crisis. Crucial chemicals like ammonium nitrate, methanol, and PVC for three months have been waived from import duty, starting April 2.

As part of the emergency measure of the government, the decision comes at a time when disruption in shipping routes amid the West Asia war has raised concerns over imports of fertiliser, crude oil and natural gas. As India is a major importer of fertiliser and petroleum, this move aims to ease supply chains and potentially lower costs for various industries.

Though the Centre’s decision is to tackle supply disruptions caused by the ongoing conflict in the Middle East, it is expected to cost the government around Rs 1,800 crore. “The temporary and targeted relief will cost the exchequer about Rs 1,800 crore, but help ensure price stability, continuity in production and supply chain,” Sanjay Mangal, CBIC member (tax policy), a top finance ministry official, told reporters here

Issuing a statement, the finance ministry also said that in light of the ongoing conflict in West Asia and the consequent disruptions in global supply chains, the government has decided to provide full customs duty exemption on critical petrochemical products till June 30. “Sectors dependent on petrochemical feedstock and intermediates such as plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments will benefit from the duty exemption,” it said.

“The exemption is expected to benefit a wide range of sectors dependent on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments. This will also provide relief to consumers of final products,” the statement said.

“This measure has been taken as a temporary and targeted relief in order to ensure continued availability of critical petrochemical inputs for domestic industry, reduce cost pressures on downstream sectors, and safeguard supply stability in the country. The goods on which the customs duty have been exempted include methanol, anhydrous ammonia, toluene, styrene, dichloromethane, vinyl chloride monomer, poly butadiene, styrene butadiene and unsaturated polyester resins,” it added.

Industry also reacted to the Centre’s decision, stating that the import duty exemption is a timely intervention aimed at containing inflationary pressures arising from the prevailing geopolitical situation. “This measure will also play a crucial role in supporting export competitiveness, as the prices of these key industrial inputs have risen sharply in recent months, significantly increasing production costs for exporters,” said Federation of Indian Export Organisations (FIEO) director general Ajay Sahai.

“By easing the input cost burden, the duty reduction will help exporters maintain pricing competitiveness in global markets, honour existing contracts, and mitigate margin pressures during this volatile period,” Sahai added.