Kamal Ghorui
Centre’s decision to remove customs duties on petrochemicals might reportedly cost the government around 18 billion rupees. The measure has been introduced under emergency provisions to tackle supply disruptions caused by the ongoing conflict in the Middle East. Announced on Thursday, the decision follows New Delhi’s invocation of emergency powers and the diversion of local chemicals towards cooking gas production to manage shortages triggered by the Gulf war.According to Reuters, the government is set to forgo an estimated 18 billion rupees or $193.02 million in revenue. Authorities have also diverted domestic chemical supplies towards cooking gas production to address shortages linked to the Gulf war situation. The import duty exemption covers 40 petrochemical products and will remain in effect until June 30, 2026, according to official information.Earleir on Wednesday, the government announced a complete customs duty exemption on select critical petrochemical inputs in order to support domestic industries facing global supply chain pressures due to the conflict in West Asia.An official statement said the exemption is aimed at ensuring steady availability of essential petrochemical raw materials for domestic manufacturing sectors and will be valid until June 30, 2026.The move comes amid rising geopolitical tensions in West Asia that have disrupted international supply chains and increased costs for industries dependent on petrochemical feedstock and intermediates.The government said the step is intended to provide temporary relief by stabilising supplies, reducing input costs, and supporting downstream industries that rely on these materials.Sectors expected to benefit include plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing industries. The decision is also expected to ease pressure on end-consumer prices by helping moderate production costs.The list of exempted items includes key petrochemical inputs such as anhydrous ammonia, methanol, toluene, styrene, vinyl chloride monomer, monoethylene glycol (MEG), phenol, acetic acid, and purified terephthalic acid (PTA), among others.It also covers polymers including polyethylene, polypropylene, polystyrene, polyvinyl chloride (PVC), polyethylene terephthalate (PET) chips, and engineering plastics such as acrylonitrile-butadiene-styrene (ABS) and polycarbonates.Speciality chemicals and intermediates such as epoxy resins, polyurethanes, formaldehyde derivatives and polyols have also been included in the exemption list.Government sources said the situation will continue to be monitored closely, with further action possible depending on how geopolitical and supply chain conditions evolve.
