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- Govt Big Decision: Plastic, Textile & Auto Sectors Get Relief | Petrochemical Import Duty Cut
New Delhi10 hours ago
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The Central Government has completely waived the basic customs duty on 40 critical petrochemical products on Wednesday i.e. 1st April. This relaxation will be applicable till June 30, 2026.
This step has been taken in view of the ongoing tension between America-Israel and Iran war and disruptions in the global supply chain.
Its objective is to ensure continuous supply of raw materials to the domestic manufacturing sector and to reduce rising costs. This will put a burden of Rs 1,800 crore on the government exchequer.
The aim is to save the industry from supply chain problems.
The official statement issued by the government said that there is uncertainty in the global market due to the ongoing conflict in West Asia. This has led to a sharp rise in the prices of petrochemical feedstock and intermediates and disruption in the supply chain. This decision will help in reducing the additional economic burden on domestic industries.
From plastics to medicines, these sectors will benefit
- Removal of custom duty will provide relief to all those industries which use petrochemical products as raw materials.
- This mainly includes plastics, packaging, textiles, pharmaceuticals, chemicals and automotive components sectors.
- Experts believe that due to reduction in input costs, the prices of final products will also remain stable. With this the common man can get relief from inflation.
Duty will no longer be imposed on these major products
The government has included many important chemicals and raw materials in the exempted list. These include:
- Chemical Inputs: Anhydrous ammonia, methanol, toluene, styrene, vinyl chloride monomer.
- Intermediates: Monoethylene Glycol (MEG), Phenol, Acetic Acid and Purified Terephthalic Acid (PTA).
- Specialty Chemicals: Epoxy resins, polyurethanes, formaldehyde derivatives and polyols.
Polymer and engineering plastics also became cheaper
Polymer categories generally used in packaging and auto sectors have also been kept under the ambit of this exemption. This includes polyethylene, polypropylene, polystyrene, PVC and PET chips. Besides, import duty has also been waived on engineering plastics like ABS and polycarbonate.
Relief will be available till June 2026
The government has made it clear that this is a temporary measure which has been taken in view of the current global tensions. The deadline for this exemption has been fixed as June 30, 2026. Government sources say that they are keeping an eye on the geopolitical situation. If needed, more steps can be taken in future considering the situation of the supply chain.
Knowledge Box: What is Petrochemical Intermediate?
If understood in simple language, intermediates are made by refining the basic chemicals extracted from crude oil or natural gas. These are not used directly, but are further used to make plastics, fibres, paints and medicines. India imports a large part of its needs from West Asia.
