Govt removes customs duty on critical petrochemicals

The government on Thursday exempted the import of critical petrochemical products from customs duty to ensure supply stability and provide relief to consumers of final products amid the crisis in West Asia.

The exemption, which will remain in place till June 30, is expected to benefit sectors dependent on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments.

In a statement, the finance ministry said that in light of the ongoing conflict in West Asia and the resulting disruption in global supply chains, the government has decided to provide full customs duty exemption on critical petrochemical products till June 30.

“This measure has been taken as a temporary and targeted relief in order to ensure continued availability of critical petrochemical inputs for domestic industry, reduce cost pressures on downstream sectors, and safeguard supply stability in the country,” it said.

The ministry added that the move would also provide relief to consumers of final products.

The products covered under the exemption include Methanol, Anhydrous ammonia, Toluene, Styrene, Dichloromethane (methylene chloride), Vinyl chloride monomer, Poly butadiene, Styrene butadiene and Unsaturated polyester resins.

Concerns over imports of fertiliser, crude oil and natural gas have risen due to disruptions in shipping routes amid the West Asia war. India is a major importer of fertiliser and petroleum.

Global crude prices have increased by almost 50 per cent since the United States and Israel launched military strikes against Iran on February 28, triggering sweeping retaliation from Tehran.

Last week, the government reduced excise duty on petrol and diesel by Rs 10 a litre as it sought to shield consumers from rising global crude prices amid the ongoing war. It also imposed an export duty of Rs 21.50 per litre on diesel and Rs 29.50 per litre on Aviation Turbine Fuel (ATF). Excise duty on petrol now stands at Rs 3 a litre, while it is currently zero on diesel.