India has temporarily waived import tariffs on 40 key petrochemical raw materials and intermediates, including ammonium nitrate, methanol, styrene, acetic acid, and PVC, effective April 2 to June 30, 2026. The move aims to stabilize supply chains and curb inflation amid the Iran war and Middle East tensions, benefiting downstream sectors such as plastics, packaging, textiles, pharmaceuticals, chemicals, and auto parts that heavily rely on imported petrochemical feedstocks.
Policy details and rationale
The Indian Ministry of Finance announced the tariff exemption on April 3, describing it as a "tailored support measure" to secure essential petrochemical supplies, reduce cost burdens on downstream industries, and maintain supply stability during the Middle East conflict. The exemption covers 40 product categories and is effective from April 2 to June 30. Analysts note the measure also targets inflation control, as India's CPI rose from 2.74% in January to 3.21% in February, partly due to rising precious metal and food prices, with March CPI expected mid-month.
Industry impact: plastics and textiles
The All India Plastics Manufacturers' Association (AIIPA) senior vice president Anil Reddy Vennam stated that India's plastics industry imports about 25% of its raw materials, with heavy reliance on the Middle East. The full exemption of the 8.5% import tariff provides relief, as raw material prices surged 65% in the first 15 days after the US-Israel-Iran war began. He added that 90% of Indian plastic manufacturers are MSMEs, with 50,000-75,000 registered units urgently needing lower input costs.
RK Vij, president of the Indian Textiles Association, reported that raw material melt prices jumped 43% in the past month, from INR 83/kg to INR 118/kg. He praised the tariff waiver, noting it now allows imports of PTA from the US or China. However, he cautioned that MEG supply shortages may persist as key suppliers Saudi Arabia and Kuwait remain affected by the war.
Broader fuel and energy measures
In late March, India also cut excise duties on petrol and diesel while imposing windfall taxes on aviation fuel and diesel exports to protect consumers from volatile oil prices driven by the Iran war. Oil Minister Hardeep Singh Puri stated that refiners were losing INR 24 billion per day before the excise cut, and the government is absorbing significant revenue losses to support them. Finance Minister Nirmala Sitharaman assured no shortages of petrol, diesel, or aviation fuel, and pledged to shield citizens from price hikes.
What buyers should watch
Importers and distributors of petrochemicals into India should note the temporary tariff exemption window until June 30, which lowers landed costs for methanol, PVC, styrene, acetic acid, and ammonium nitrate. However, MEG supply from Saudi Arabia and Kuwait remains constrained, potentially affecting downstream polyester and textile chains. The Indian government's intervention in aviation fuel pricing, with domestic hikes capped at 8.5-9% versus an initial 114% increase, signals active price control measures that may influence broader chemical cost dynamics. Buyers should monitor India's March CPI release mid-month for inflation trends and potential policy extensions.
Source: Read the original report | Published: April 06, 2026