India Grants Full Customs Duty Exemption on Petrochemical Imports Amid US–Iran War Disruptions

The move comes amid a war which has disrupted global supply chains, tightened shipping routes, and pushed up input costs for energy-linked industries worldwide. According to the Finance Ministry, the exemption is a temporary, targeted intervention to ensure uninterrupted availability of key petrochemical inputs and to contain inflationary pressures across sectors.

The West Asia crisis, fuelled by rising tensions between the United States and Iran, threats to critical shipping lanes like the Strait of Hormuz, and sporadic strikes on energy infrastructure, has already begun impacting global trade flows. India, which relies heavily on imported petrochemical feedstock, is particularly vulnerable to such disruptions.

The ministry said the move will support industries such as plastics, packaging, textiles, pharmaceuticals, chemicals, and automotive manufacturing, while also easing the burden on consumers. Petrochemicals are core industrial inputs, feeding into everything from plastic packaging and textiles to car parts, electronics, medicines, and fertilizers, and any spike in their cost quickly cascades into higher prices across the economy.

The exemption covers a broad spectrum of petrochemical feedstocks, intermediates, and polymers, including basic chemicals and intermediates such as Anhydrous ammonia, Toluene, Styrene, Dichloromethane (methylene chloride), Vinyl chloride monomer, Methanol (methyl alcohol), Isopropyl alcohol, Monoethylene Glycol (MEG), Phenol, Acetic acid, Vinyl acetate monomer, Purified Terephthalic Acid (PTA), Ethylenediamine, Diethanolamine & Monoethanolamine, Toluene di-isocyanate, Ammonium nitrate, and Linear alkylbenzenes.

Major polymers and plastics covered under the exemption include Polymers of ethylene (including EVA), Polypropylene, Polystyrene, Styrene-acrylonitrile (SAN), Acrylonitrile-butadiene-styrene (ABS), Polyvinyl Chloride (PVC), Polytetrafluoroethylene (PTFE), Polyvinyl acetate, Polyvinyl alcohol, Poly (methyl methacrylate), and Polyoxymethylene (POM/acetal).

Advanced materials and engineering plastics such as Polyols, Polyether Ether Ketone (PEEK), Epoxy resins, Polycarbonates, Alkyd resins, Polyethylene terephthalate (PET) chips, Unsaturated polyester resins, Polybutylene terephthalate, Polyurethanes, and Polyphenylene sulphide (PPS) are also included.

Industrial resins and rubber products covered include Formaldehyde an

d related resins (urea, melamine, phenol formaldehyde), Polybutadiene, and Styrene-butadiene rubber.

By eliminating customs duties, the government aims to lower input costs for manufacturers, prevent supply shortages, stabilise prices of everyday goods, and support export competitiveness. The decision reflects growing concern over the economic fallout of the US–Iran conflict, which has increased volatility in crude oil and petrochemical markets, raised insurance and freight costs for shipments through West Asia, and triggered fears of chokepoints like the Strait of Hormuz being disrupted.

The exemption will remain in place until June 30, 2026, suggesting the government expects continued uncertainty in global markets in the near term. The move signals a calculated intervention to protect domestic industries and consumers from the cascading effects of a prolonged geopolitical crisis.