In a major move aimed at stabilizing domestic supply and easing cost pressures across the petrochemical value chain, the Government of India has announced a full customs duty exemption (Nil rate) on a wide range of petrochemicals, intermediates, and polymers. The decision was issued under Notification No. 12/2026–Customs (G.S.R. 246[E]), published in The Gazette of India (Extraordinary) on April 1, 2026, and will remain effective from April 2, 2026, until June 30, 2026 (inclusive).
The duty waiver covers a broad spectrum of products across upstream chemicals, intermediates, and finished polymers, reflecting the government’s effort to counter supply disruptions and rising feedstock costs amid ongoing global uncertainties.
Feedstocks and basic petrochemicals included under the exemption list comprise key raw materials such as methanol, toluene, styrene, Vinyl chloride monomer (VCM), Monoethylene glycol (MEG), phenol, acetic acid, Vinyl acetate monomer (VAM), Purified terephthalic acid (PTA), ethanolamines, and Toluene di-isocyanate (TDI). These materials are critical inputs for multiple downstream industries, including plastics, fibers, solvents, and resins.
In the commodity polymer segment, widely used materials such as Polyethylene (PE), Polypropylene (PP), Polystyrene (PS), and Polyvinyl chloride (PVC) have been granted full duty relief. This is expected to directly benefit sectors such as packaging, infrastructure, and consumer goods manufacturing.
The notification also extends to engineering plastics and specialty materials, including ABS, SAN, Polycarbonate (PC), Polyoxymethylene (POM), PTFE, PPS, and PEEK, which are extensively used in automotive, electronics, and high-performance industrial applications.
Further, products in the polyester and resin value chain, such as PET chips, Polybutylene terephthalate (PBT), epoxy resins, polyurethanes, alkyd resins, and formaldehyde-based resins, have also been included, supporting industries like textiles, coatings, construction chemicals, and adhesives.
The exemption additionally covers synthetic rubbers, including Polybutadiene and Styrene-butadiene rubber (SBR), which are essential for tyre manufacturing and automotive applications.
Separately, under Notification No. 13/2026–Customs (G.S.R. 247(E)), the government has also provided relief on Agriculture Infrastructure and Development Cess (AIDC) by reducing it to nil on ammonium nitrate, further supporting the fertilizer and allied sectors.
Market participants expect the move to improve import viability, ease tight supply conditions, and provide cost relief to downstream processors. The decision comes at a time when global petrochemical markets are witnessing heightened volatility due to supply disruptions, logistical challenges, and elevated energy prices, which have significantly impacted feedstock availability and pricing trends.
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