India scraps customs duty on petrochemicals amid West Asia conflict

The government has exempted full customs duty on select petrochemicals until June 30, 2026, to shield domestic industries from supply disruptions due to the West Asia conflict, aiming to stabilize supplies and ease input costs for various sectors.

In a move to cushion domestic industries from global supply disruptions, the Government on Wednesday announced a full customs duty exemption on select critical petrochemical products in view of the ongoing conflict in West Asia.

According to an official statement, the exemption will remain in force till June 30, 2026, and aims to ensure the uninterrupted availability of essential petrochemical inputs for domestic manufacturing sectors.

Relief Amid Geopolitical Tensions

The decision comes amid heightened geopolitical tensions in West Asia, which have led to disruptions in global supply chains and increased cost pressures on industries reliant on petrochemical feedstock and intermediates. The government said the measure is intended as a temporary relief to stabilise supplies, ease input costs, and support downstream industries that depend heavily on such raw materials.

A wide range of sectors is expected to benefit from the exemption, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, and other manufacturing segments. The move is also likely to provide indirect relief to consumers by moderating prices of final products.

List of Exempted Products

Key Petrochemical Inputs

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.

Polymer Categories

In addition, several polymer categories have been covered under the exemption, including polyethylene, polypropylene, polystyrene, polyvinyl chloride (PVC), polyethylene terephthalate (PET) chips, and engineering plastics like acrylonitrile-butadiene-styrene (ABS) and polycarbonates.

Speciality Chemicals and Intermediates

Speciality chemicals and intermediates such as epoxy resins, polyurethanes, formaldehyde derivatives, and polyols have also been included in the exemption list.

Industry Impact and Future Outlook

Industries are expected to benefit from reduced input costs, improved supply chain stability, and enhanced production continuity amid volatile global conditions.

Government sources indicates the situation will be closely monitored, and further measures may be considered depending on the evolving geopolitical and supply chain dynamics.

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