The Ministry of Finance announced a complete exemption from customs duties on a wide range of important petrochemical products to protect the local industry amid the raging war between the United States and Iran. The ministry said in a statement that the exemptions will remain in effect until June 30, 2026.
The move comes amid a war that has disrupted global supply chains, tightened shipping routes and raised input costs for energy-related industries around the world.
Relief amid global unrest
According to the Ministry of Finance, the exemption is a temporary and targeted intervention to ensure the continued availability of key petrochemical inputs and contain inflationary pressures across sectors.
The West Asia crisis – fueled by escalating tensions between the United States and Iran, threats to vital shipping lanes such as the Strait of Hormuz, and sporadic strikes on energy infrastructure – is already beginning to impact global trade flows. India, which relies heavily on imported petrochemical raw materials, is particularly vulnerable to such disruptions.
The ministry said the move will support industries such as plastics, packaging, textiles, pharmaceuticals, chemicals and the automobile industry, while also reducing the burden on consumers.
The full list of items that will become cheaper
The exemption covers a wide range of petrochemical feedstocks, intermediates and polymers. Key elements include:
Basic and intermediate chemicals
- 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 and monoethanolamine
- Toluene diisocyanate
- Ammonium nitrate
- Linear alkyl benzene
Major polymers and plastics
- Ethylene polymers (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)
Advanced materials and engineering plastics
- Polyols
- Polyether ether ketone (PEEK)
- Epoxy resin
Polycarbonate
- Alkyd resins
- Polyethylene terephthalate (PET) flakes.
- Unsaturated polyester resin
- Polybutylene terephthalate
- Polyurethane
- Polyphenylene sulfide (PPS)
Synthetic resins and rubber
- Formaldehyde and related resins (urea, melamine, phenol formaldehyde)
- Polybutadiene
- Styrene butadiene rubber
Why is this important?
Petrochemicals are an essential industrial input, making their way into everything from plastic packaging and textiles to car parts, electronics, pharmaceuticals and fertilisers. Any increase in their cost quickly leads to higher prices throughout the economy.
By canceling customs duties, the government aims to:
- Lower input costs for manufacturers
- Prevent supply shortages
- Stability of daily commodity prices
- Supporting export competitiveness
- Supply risks resulting from war
The decision reflects growing concern about the economic repercussions of the US-Iran conflict, which has led to:
- Increased volatility in the crude oil and petrochemical markets
- Increased insurance and shipping costs for shipments across West Asia
- It has raised concerns about disrupting choke points such as the Strait of Hormuz
The exemption will remain in effect until June 30, 2026, indicating that the government expects continued uncertainty in global markets in the near term.
