Customs duty exemption on critical petrochemical products to benefit auto, pharma, textiles, plastics sector

In a move that will bring much-needed reprieve across sectors amid the West Asia conflict, the government has granted  full customs duty exemption on critical petrochemical products in view of ongoing conflict in West Asia. The exemption will benefit sectors like pharma, textiles, and plastics among others.

“In light of the ongoing conflict in West Asia and the consequent disruptions in global supply chains, the government of India has decided to provide full customs duty exemption on critical petrochemical products till 30th June, 2026,” said a release from the ministry of finance earlier today.

“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,” the government said in the release.

“The exemption is expected to benefit a wide range of sectors dependent on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments. This will also provide relief to consumers of final products,” it added.

What other measures has the government taken?

The government’s stance in response to the West Asia crisis has been focused on calibrated response with an aim of preventing the shock to the Indian businesses and citizens. Yesterday, the government mandated oil marketing companies to pass on only up to 25% of ATF price hike to domestic airlines against almost a 100% hike in the global ATF prices.

Effective April 1, 2026, the government mandated PSU OMCs to pass on up to 25% hike on the Aviation Turbine Fuel (ATF) price for domestic airlines against an expected 100% hike. Of this, the OMCs have passed on 8.5% hike to airlines.

“ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on a formula of international benchmarks. Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100% on 1 April,” said the ministry of petroleum in a post on X yesterday.

“In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs.15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world,” it added.