The Indian government has granted a full customs duty exemption on around 40 critical petrochemical products until June 30, 2026, to ease cost pressures caused by the West Asia conflict and disruptions in global supply chains.
The Ministry of Finance said the move was intended as a temporary relief measure to ensure the availability of essential petrochemical inputs, reduce costs for manufacturers, and maintain supply stability.
The exemption is expected to benefit industries that depend on petrochemical feedstocks, including plastics, packaging, textiles, pharmaceuticals, chemicals, and automotive components.
Products covered by the exemption include anhydrous ammonia, methanol, acetic acid, ammonium nitrate, polypropylene, polyvinyl chloride, polycarbonates, and polyurethanes.
The government estimates the three-month exemption will result in a revenue loss of about Rs 1,800 crore.
The measure comes as higher crude oil prices and supply disruptions linked to the Iran conflict have raised input costs for Indian industries. Manufacturers have reported shortages of natural gas for car paint shops, higher sulphuric acid prices, and difficulties securing technical-grade urea and packaging materials.
Domestic petrochemical production has also been affected after the government diverted butane and propane supplies toward cooking gas production and restricted natural gas supplies to petrochemical plants and refineries.
India is especially vulnerable because about 90 per cent of its liquefied petroleum gas imports and 60 per cent of its liquefied natural gas imports come from West Asia through the Strait of Hormuz.
The government has introduced several other measures to address the supply shortage. Last week, it increased commercial LPG allocations to states and union territories by another 20 per cent, taking supplies to 70 per cent of pre-crisis levels.
Priority for additional LPG supplies has been given to industries such as steel, automobiles, textiles, chemicals, and plastics, particularly where LPG cannot be replaced by natural gas.
The government has also required commercial LPG users to register with public sector fuel retailers and apply for piped natural gas connections to remain eligible for supplies.