Centre grants full customs duty exemption on key petrochemical products amid West Asia crisis

In view of the ongoing geopolitical tensions in West Asia and the resulting strain on global supply chains, the Centre has announced a full exemption on customs duty for select petrochemical products until June 30, 2026.

The move is aimed at ensuring the uninterrupted availability of critical raw materials for domestic industries that rely heavily on petrochemical inputs. Officials said the decision is a targeted, short-term measure to counter volatility in international markets, reduce cost pressures on downstream sectors, and safeguard supply stability in the country.

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Industries to benefit across sectors

According to the Finance Ministry, the exemption is expected to bring relief to a wide range of sectors, including plastics, packaging, textiles, pharmaceuticals, chemicals, and automotive manufacturing. These industries depend on petrochemical feedstock for production, and rising input costs have begun to impact margins.

The government also expects the measure to help contain price rise in finished goods, indirectly benefiting consumers.

List of exempted petrochemical products

The exemption covers several widely used industrial chemicals and intermediates, including:

• Anhydrous ammonia
• Toluene
• Styrene
• Dichloromethane (methylene chloride)
• Vinyl chloride monomer
• Methanol (methyl alcohol)
• Isopropyl alcohol
• Monoethylene Glycol (MEG)
• Phenol

The list also includes:

• Acetic acid
• Vinyl acetate monomer
• Purified Terephthalic Acid (PTA)
• Ammonium nitrate
• Polymers of ethylene (including Ethylene-vinyl acetate)
• Epoxy resins
• Formaldehyde and its derivatives, such as urea formaldehyde, melamine formaldehyde, and phenol formaldehyde

Short-term measure with wider impact

The government noted that disruptions in global logistics and supply chains, triggered by the West Asia conflict, have affected the steady flow of essential petrochemical products. By removing import duties temporarily, the government aims to stabilise supplies and prevent shortages in the domestic market.

The government has positioned the duty waiver as a calibrated intervention to shield domestic manufacturing from global shocks. While temporary in nature, the move is expected to provide breathing space to industries grappling with rising input costs and uncertain supply conditions.