Govt grants temporary customs duty relief on petrochemicals amid US-Iran war
Duty exemption on 40 key petrochemical products aims to stabilise supply chains, ease cost pressures, and support industries affected by West Asia disruptions.
In a bid to shield the domestic industry amid the escalating US-Iran war, the Finance Ministry on Thursday (April 2) announced customs duty exemptions on a large number of critical petrochemical products. The ministry, in an official statement, said the exemption was temporary and will take effect as of June 30.
Key products identified
The development comes at a time when the escalating West Asia conflict has resulted in severe disruption to global supply chains, especially in energy-related products, with the crucial Strait of Hormuz becoming the main flashpoint between the Islamic Republic and the US.
Also Read: Commercial LPG supply restored to 70 per cent, says Centre, amid West Asia conflict
The list of 40 such products released by the Finance Ministry includes anhydrous ammonia, toluene, styrene, dichloromethane (methylene chloride) and vinyl chloride monomer.
Relief for dependent sectors
Describing the move as a “targeted relief”, the Finance Ministry stated that it would benefit sectors dependent on petrochemical feedstock and intermediates like plastics and packaging.
Also Read: India has 60 days of oil reserves, govt assures no fuel shortage
“Exemption will benefit sectors dependent on petrochemical feedstock and intermediates such as plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, other manufacturing segments and provide relief to consumers of final products,” stated the Ministry.
“In light of the ongoing conflict in West Asia and the consequent disruptions in global supply chains, the Government of India has decided to provide full Customs Duty exemption on critical petrochemical products till 30th June, 2026,” it added.
Ensuring supply stability
Elaborating further, the ministry stated that the move is aimed at ensuring the uninterrupted availability of critical petrochemical supplies for the domestic industry.
Also Read: Centre assures adequate fuel supply, prioritises PNG amid West Asia conflict
“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,” stated the ministry.
“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,”
Wider economic impact
Petrochemical products sit at the base of a wide swathe of industrial activity, serving as essential inputs for sectors ranging from plastic packaging and textiles to automotive components, electronics, pharmaceuticals and fertilisers.
Any upward movement in their prices tends to pass through quickly, pushing up costs across multiple segments of the economy.