India’s government is considering extending the customs duty exemption on around 40 critical petrochemical products beyond its scheduled expiry on 30th June, as it assesses the evolving geopolitical situation in West Asia and the potential impact on trade flows and government revenues.
The temporary duty relief, introduced on 2nd April, reduced customs duties to zero on a range of key petrochemical feedstocks and intermediates, including anhydrous ammonia, toluene, styrene, vinyl chloride monomer and several other products. The measure was implemented to shield domestic industries from supply chain disruptions and rising input costs amid geopolitical uncertainties affecting global trade routes.
According to government officials, any decision on extending the exemption will depend on developments in West Asia, particularly the impact on cargo movements through the Strait of Hormuz, a vital shipping corridor for global energy and petrochemical supplies. Officials also indicated that revenue implications would be an important factor in the final assessment.
The duty waiver has delivered significant benefits to downstream industries by lowering the landed cost of imported raw materials and intermediates such as polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC). The reduction in import costs has contributed to softer polymer prices, with market assessments showing notable declines in LLDPE, LDPE and suspension-grade PVC prices since early April.
Industry participants report that the exemption has improved supply availability, eased inflationary pressures and helped protect margins for manufacturers, particularly those operating in sectors with high raw material intensity or fixed-price contracts.
The exemption was designed to support a broad range of industries reliant on petrochemical feedstocks, including textiles, packaging, plastics, pharmaceuticals, chemicals, automotive components and other manufacturing sectors. Labour-intensive micro, small and medium enterprises (MSMEs), which often have limited ability to pass on higher costs, have been among the major beneficiaries.
The list of exempted products includes methanol, anhydrous ammonia, toluene, styrene, dichloromethane (methylene chloride), vinyl chloride monomer, polybutadiene, styrene-butadiene rubber and unsaturated polyester resins, among others.
Market participants, particularly plastic converters and downstream manufacturers, have been urging the government to continue the relief measure, arguing that it has helped stabilise costs and ensure adequate raw material availability.
Market analysts noted that the waiver has already exerted downward pressure on petrochemical prices by increasing import availability and reducing landed costs. Should the exemption be extended, imported petrochemical products such as PE, PP and PVC are expected to remain under pressure, potentially providing further cost advantages to downstream manufacturing industries and consumers.
Bharat Tex Special Report 2026 
