India allows zero duty on petrochemical imports to cushion industry from supply crunch

To cushion the domestic industry from global supply disruptions, India has granted full customs duty exemption on select critical petrochemical products until June 30, 2026, citing the ongoing conflict in West Asia and its impact on supply chains.

The decision, notified by the Finance Ministry, aims to ensure the continued availability of key petrochemical inputs, reduce cost pressures across industries, and maintain supply stability.

The exemption comes into effect from April 2, 2026, and will remain valid through the end of June.

According to the notification, the relief covers a wide range of petrochemical feedstocks and intermediates, including methanol, acetic acid, monoethylene glycol (MEG), purified terephthalic acid (PTA), polymers such as polyethene, polypropylene, PVC, and engineering plastics like ABS and polycarbonates.

The government said the measure is designed as a temporary and targeted intervention to address supply-side constraints arising from the West Asia conflict, which has disrupted global energy and petrochemical markets.

A broad set of downstream sectors is expected to benefit from the duty waiver, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, and other manufacturing segments.

The move is also likely to provide some relief to end consumers by easing input cost pressures.

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Separately, the government has also granted exemption from Agriculture Infrastructure and Development Cess on ammonium nitrate for the same period, further reducing input costs in specific industrial segments.

Shares of companies reliant on petrochemical inputs could see positive traction following the announcement.

This includes packaging firms, plastic manufacturers, and textile players that depend on polymers like PET, PVC, and polypropylene. Chemical companies and paint makers may also benefit from lower input costs. Additionally, downstream auto component manufacturers could see margin support.

However, domestic petrochemical producers may face some pricing pressure due to cheaper imports enabled by the duty exemption.