The Indian government has announced full customs duty exemption on a range of critical petrochemical products till 30 June 2026, as part of a targeted relief measure to mitigate the impact of the ongoing West Asia conflict on the domestic industry and supply chains.
In an official release, the ministry of finance (MoF) says the decision was taken in view of disruptions in global trade flows triggered by the conflict involving Iran which has raised concerns over the availability and pricing of key industrial inputs.
The exemption aims to ensure an uninterrupted supply of essential petrochemical feedstock, reduce cost pressures on downstream industries, and maintain overall supply stability in the country.
“This measure has been taken as a temporary and targeted relief in order to ensure continued availability of critical petrochemical inputs for the domestic industry, reduce cost pressures on downstream sectors, and safeguard supply stability in the country,” the ministry says.
The relief is expected to benefit a wide range of sectors heavily dependent on petrochemical derivatives, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, and other manufacturing segments. The government added that the move would also provide indirect relief to consumers by easing input costs for finished goods.
The list of products covered under the exemption includes key industrial chemicals such as anhydrous ammonia, toluene, styrene, dichloromethane, vinyl chloride monomer, methanol, isopropyl alcohol, monoethylene glycol (MEG) and phenol.
Other inputs include acetic acid, vinyl acetate monomer, purified terephthalic acid (PTA), ammonium nitrate, ethylene polymers, epoxy resins, formaldehyde-based resins and melamine derivatives, among others.
The decision comes amid heightened geopolitical tensions in West Asia which have disrupted maritime trade routes and raised freight and insurance costs. The strategic Strait of Hormuz remains a key concern for global energy and petrochemical supplies.
In a related move last month, the Union ministry of commerce and industry restored rates and value caps under the remission of duties and taxes on exported products (RoDTEP) scheme for all eligible exports from 23 March 2026. The step is aimed at supporting exporters facing elevated logistics costs and trade risks due to disruptions in the Gulf region.
Officials say the twin measures are intended to cushion the Indian economy from external shocks arising out of the conflict while maintaining export competitiveness and industrial output.
Despite the ongoing tensions, the government maintained that India remains adequately stocked with key fuels, including crude oil, petrol, diesel, aviation turbine fuel (ATF), LPG (liquefied natural gas) and LNG (liquefied natural gas), with sufficient inventories to manage with sufficient inventories to manage short-term disruptions. Authorities also highlighted diversified sourcing strategies to ensure energy security.
The customs duty exemption would provide immediate relief to manufacturing sectors grappling with rising input costs, though prolonged geopolitical instability could continue to pose risks to supply chains and inflation.
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