To mitigate the impact of the West Asia crisis on domestic industries and consumers, India has temporarily waived customs duties on critical petrochemical imports, ensuring supply stability and reducing cost pressures.
Photograph: Reuters
Key Points
- The Indian government has exempted customs duty on critical petrochemical imports until June 30 to stabilise supply chains amid the West Asia crisis.
- Sectors like plastics, packaging, textiles, and pharmaceuticals will benefit from this duty exemption, estimated to cost the exchequer ₹1,800 crore.
- The duty exemption covers essential petrochemicals including Methanol, Anhydrous ammonia, Toluene, and Styrene.
- Disruptions in shipping routes due to the West Asia conflict have raised concerns over imports of fertiliser, crude oil, and natural gas, prompting the government’s action.
- Global crude prices have risen significantly since military strikes in the region, impacting import costs and necessitating government intervention.
The government on Thursday exempted import of critical petrochemical products from customs duty for three months till June 30, to ensure supply stability and provide relief to consumers of final products amid the crisis in West Asia.
Sectors dependent on petrochemical feedstock and intermediates such as plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments will benefit from the duty exemption which will cost the exchequer Rs 1,800 crore.
In a statement, the finance ministry said in light of the ongoing conflict in West Asia and the consequent disruptions 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.
This will also provide relief to consumers of final products, it added.
Petrochemicals Included in the Duty Exemption
The goods on which the customs duty have been exempted include Methanol, Anhydrous ammonia, Toluene , Styrene, Dichloromethane (methylene chloride), Vinyl chloride monomer, Poly butadiene, Styrene butadiene and Unsaturated polyester resins.
Impact of West Asia Conflict on Imports
Disruption in shipping routes amid the West Asia war has raised concerns over imports of fertiliser, crude oil and natural gas.
India is a major importer of fertiliser and petroleum.
Global crude prices have risen by almost 50 per cent since the United States and Israel launched military strikes against Iran on February 28, triggering sweeping retaliation from Tehran.
The government had last week slashed excise duty on petrol and diesel by Rs 10 a litre as it looked to shield consumers from the impact of rising global crude prices amid the ongoing war, 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 has been slashed to Rs 3 a litre, while on diesel it is zero currently.
