Petchem import duty waiver to cost govt ₹1,800 cr in 3 months

UK-led 40-nation group vows to reopen Strait of Hormuz, while New Delhi cuts petchem duty to support industry. Rupee, equities recover, while crude surges after Trump's address

- MONIKA YADAV

Amid the ongoing West Asia conflict, the government on Thursday announced a full Customs duty exemption on a wide range of critical petrochemical raw materials until June 30, which is expected to cost the exchequer around ₹1,800 crore over three months.

The decision comes a day after Prime Minister Narendra Modi chaired a special meeting of the Cabinet Committee on Security to review the situation and consider further measures in light of the conflict. According to a finance ministry statement, the relief is expected to support sectors such as plastics, packaging, textiles, pharmaceuticals, chemicals, and automotive components. Customs duty imposed on these petrochemical products are in the range of 5-10 per cent.

“This measure has been taken as a temporary and targeted intervention to ensure the continued availability of critical petrochemical inputs for domestic industry, cut cost pressures on downstream sectors, and safeguard supply stability,” it said. The exemption covers key petrochemical feedstocks, intermediates, and polymers used across manufacturing value chains, including chemicals such as methanol, phenol, and monoethylene glycol, as well as polymers like polyethylene, polypropylene, and polyvinyl chloride.

Finance ministry officials indicated the duty relief could result in a revenue loss of around ₹1,800 crore in the next three months, based on past trends, though they cautioned the estimate remained dynamic.