Ministry of Finance Removes Import Duty on 40 Petrochemical Products Amid West Asia Crisis

As a result of the West Asian crisis, the government has granted an exemption to 40 imports of petrochemicals till June 30. Currently, the import duty on such goods ranges between 7.5% and 10%.

By eliminating the import duty completely, the price of these commodities is going to be reduced; thus, reducing the prices of end products made out of them.

This move of the Ministry will be helpful for industries like plastic, packaging, textile, pharmaceutical, chemical, and automotive industries. In the past month, prices of raw materials for the plastic and pharmaceutical industry have increased up to 100%. The petroleum products are generally imported from West Asian nations.

Due to the Iran war, the price of petroleum by-products has risen by 75-100 percent in the past month due to the rising prices of these items. The war is impacting the supply of petrochemicals.

The price of plastic granules used in the manufacture of plastic items has risen from ₹110 per kilogram to over ₹220 per kilogram in the past month.

According to pharmaceutical manufacturers, the price of paracetamol raw materials has risen from ₹230 per kilogram to ₹500 per kilogram. Packaging costs are also rising, leading to a shortage of plastic bags for packaging medicines and wheat. The raw materials used for polyester clothing are also derived from petroleum products.

Small businesses in the plastic and packaging industries have begun cutting back on their production due to the rising prices of raw materials. They believe that selling expensive plastic items will be difficult, leading to a loss of capital.

With the abolition of import duty, they will get raw materials at cheaper rates, which will provide relief to them as well as the consumers. The major products exempted from import duty are polypropylene, polystyrene, phenol, vinyl chloride, acetic acid, monoethylene glycol, isopropyl alcohol, polyols, unsaturated polyester, poly butadiene etc.