Govt exempts import duty on key petrochemical products

 The government on Thursday exempted import of critical petrochemical products from customs duty for three months till June 30, to ensure supply stability and provide relief to consumers of final products amid the crisis in West Asia.

Sectors dependent on petrochemical feedstock and intermediates such as plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments will benefit from the duty exemption which will cost the exchequer INR 1,800 crore.

In a statement, the finance ministry said in light of the ongoing conflict in West Asia and the consequent disruptions in global supply chains, the government has decided to provide full customs duty exemption on critical petrochemical products till June 30.

“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,” it said.This will also provide relief to consumers of final products, it added.

The goods on which the customs duty have been exempted include Methanol, Anhydrous ammonia, Toluene , Styrene, Dichloromethane (methylene chloride), Vinyl chloride monomer, Poly butadiene, Styrene butadiene and Unsaturated  polyester resins.

Disruption in shipping routes amid the West Asia war has raised concerns over imports of fertiliser, crude oil and natural gas. India is a major importer of fertiliser and petroleum.

Global crude prices have risen by almost 50 per cent since the United States and Israel launched military strikes against Iran on February 28, triggering sweeping retaliation from Tehran.

The government had last week slashed excise duty on petrol and diesel by INR 10 a litre as it looked to shield consumers from the impact of rising global crude prices amid the ongoing war, also imposed an export duty of INR 21.50 per litre on diesel and INR 29.50 per litre on Aviation Turbine Fuel (ATF). Excise duty on petrol has been slashed to INR 3 a litre, while on diesel it is zero currently.