The Finance Ministry has issued a notification declaring the exemption of customs duty on several key petrochemical products. The exemption has been issued till June 30, 2026. The move has been undertaken in order to ensure the smooth supply of the products and protect the domestic industry from rising costs due to the US-Iran conflict.
This move has been undertaken at a point in time when the world supply chains are feeling the strain. The tensions in West Asia, threats to key shipping routes such as the Strait of Hormuz, and strikes on energy infrastructure have already begun to affect the flow of trade. India relies heavily on the import of petrochemical feedstock.
According to the ministry, this is a temporary measure to ensure access to essential inputs and curb inflationary pressures in various sectors.
The exemption is likely to benefit various sectors, such as plastics, packaging, textiles, pharmaceuticals, chemicals, and automobile manufacturing. The reduced costs will also help curb inflationary pressures, especially for common products that rely on petrochemical derivatives.
👉 In a targeted relief, Government grants full customs duty exemption on critical petrochemical products in view of ongoing conflict in West Asia
— Ministry of Finance (@FinMinIndia) April 2, 2026
👉 Exemption will benefit sectors dependent on petrochemical feedstock and intermediates such as plastics, packaging, textiles,… pic.twitter.com/C0gp2AfDvf
Key items covered under exemption
The exemption spans basic chemicals, intermediates, polymers, and advanced materials. Among the major inclusions are:
Basic chemicals and intermediates
Anhydrous ammonia
Toluene
Styrene
Dichloromethane (methylene chloride)
Vinyl chloride monomer
Methanol (methyl alcohol)
Isopropyl alcohol
Monoethylene Glycol (MEG)
Phenol
Acetic acid
Vinyl acetate monomer
Purified Terephthalic Acid (PTA)
Ethylenediamine
Diethanolamine & Monoethanolamine
Toluene di-isocyanate
Ammonium nitrate
Linear alkylbenzenes
Major polymers & plastics
Polymers of ethylene (including EVA)
Polypropylene
Polystyrene
Styrene-acrylonitrile (SAN)
Acrylonitrile-butadiene-styrene (ABS)
Polyvinyl Chloride (PVC)
Polytetrafluoroethylene (PTFE)
Polyvinyl acetate
Polyvinyl alcohol
Poly (methyl methacrylate)
Polyoxymethylene (POM/acetal)
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Advanced materials & engineering plastics
Polyols
Polyether Ether Ketone (PEEK)
Epoxy resins
Polycarbonates
Alkyd resins
Polyethene terephthalate (PET) chips
Unsaturated polyester resins
Polybutylene terephthalate
Polyurethanes
Polyphenylene sulphide (PPS)
Industrial resins and rubber
Formaldehyde and related resins (urea, melamine, phenol formaldehyde)
Polybutadiene
Styrene-butadiene rubber
Why this matters
Petrochemicals are the mainstay of many manufacturing industries. Any increase in their prices creates a ripple effect on the economy as a whole, impacting everything from packaging and clothing to automobile parts and pharmaceuticals.
By abolishing customs duty, the government seeks to curb production costs, prevent shortages, and maintain price stability.
As per a report by Hindustan Times, this exemption is an indication of the growing concerns regarding volatility in the crude oil and petrochemical markets. Higher freight and insurance costs and concerns over critical sea routes, still remain issues. This exemption is to be effective till the end of June 2026. This is an indication that volatility is to be an ongoing feature in the near future.
