West Asia crisis: Major relief to select sectors as Govt cuts import duty to zero on 40 petrochemical, plastic products

The Central government on Tuesday notified a sweeping customs duty exemption on 40 categories of petrochemicals, plastics and industrial raw materials, bringing the effective import duty down to nil on all listed goods for a period of three months.

The notification, issued by the Ministry of Finance (Department of Revenue), invokes powers under Section 25(1) of the Customs Act, 1962, citing public interest as the basis for the relief.

The exemption comes into force on Thursday and would remain effective through June 30, 2026.

What is covered

The goods covered under the exemption span a wide range of critical industrial inputs, including: Basic petrochemicals such as anhydrous ammonia, toluene, styrene, methanol, acetic acid and monoethylene glycol (MEG); Chlorinated compounds, including dichloromethane, vinyl chloride monomer and polyvinyl chloride (PVC); Engineering plastics such as polycarbonates, polyurethanes, polypropylene, polystyrene, and the high-performance polymer PEEK (Polyether Ether Ketone); Specialty resins including epoxy resins, alkyd resins, unsaturated polyester resins, and phenol formaldehyde; Ammonium nitrate, which also received a simultaneous exemption from the Agriculture Infrastructure and Development Cess.

Why is this important

The blanket zero-duty window on such a broad basket of chemicals and polymers signals the government's intent to provide short-term cost relief to downstream industries — including packaging, automotive, textiles, construction, and agriculture — that depend heavily on these raw materials. Many of these inputs are not produced domestically in sufficient quantities, making import costs a significant burden on manufacturers.

The simultaneous AIDC exemption on ammonium nitrate — a key input in fertiliser production — underscores the government's sensitivity to agricultural input costs ahead of the kharif sowing season.