The Ministry of Finance and the Central Board of Indirect Taxes and Customs have reduced import duty to nil on 40 critical petrochemical products with effect from April 2, 2026, valid through June 20, 2026. The notification, CBIC Customs Notification No. 12/2026-Customs dated April 1, 2026, is one of the most significant industrial input duty relief measures in recent years and arrives directly in response to the petrochemical supply chain disruption caused by the Iran war and the Strait of Hormuz closure.
The two-and-a-half month window of zero import duty on these 40 products gives Indian manufacturers across plastics, chemicals, pharmaceuticals, textiles, packaging, automotive, and construction sectors a temporary but meaningful relief on raw material costs at a moment when global petrochemical supply chains are under severe stress.
Why This Notification Was Issued
The Iran war has disrupted petrochemical supply chains across the globe. The Strait of Hormuz closure has blocked or delayed shipments of crude oil derivatives and petrochemical feedstocks that flow from Gulf producers to Asian manufacturing hubs including India. The resulting supply squeeze has pushed prices of petrochemical raw materials sharply higher while simultaneously constraining availability for Indian manufacturers whose production depends on continuous feedstock supply.
By cutting import duty to nil on 40 critical petrochemicals, the government is removing the tariff component from the landed cost of these materials, partially offsetting the price increase driven by global supply disruption and enabling Indian manufacturers to source from a wider range of suppliers globally without the duty cost making non-Gulf sources uncompetitive. The June 20, 2026 end date provides a defined window that will be reviewed based on how the Iran conflict and Strait of Hormuz situation evolves.
The Complete List of 40 Petrochemicals Now at Nil Import Duty
The following products have had their import duty reduced to nil with effect from April 2, 2026.
- Anhydrous ammonia
- Toluene
- Styrene
- Dichloromethane, also known as methylene chloride
- Vinyl chloride monomer
- Methanol, also known as methyl alcohol
- Isopropyl alcohol
- Monoethylene Glycol, known as MEG
- Phenol
- Acetic acid
- Vinyl acetate monomer
- Purified Terephthalic Acid, known as PTA
- Ethylenediamine
- Di Ethanolamine and Mono Ethanolamine
- Toluene di-isocyanate
- Ammonium nitrate
- Linear alkylbenzenes
- Polymers of ethylene including Ethylene-vinyl acetate
- Polypropylene
- Polystyrene
- Styrene-acrylonitrile, known as SAN
- Acrylonitrile-butadiene-styrene, known as ABS
- Polyvinyl Chloride, known as PVC
- Polytetrafluoroethylene
- Poly vinyl acetate
- Poly vinyl alcohol
- Poly methyl methacrylate
- Polyoxymethylene, known as POM-acetal
- Polyols
- Polyether Ether Ketone, known as PEEK
- Epoxy resins
- Polycarbonates
- Alkyd resins
- Poly ethylene terephthalate PET Chips
- Unsaturated polyester resins
- Poly butylene terephthalate
- Formaldehyde, Urea formaldehyde, Melamine formaldehyde, and Phenol formaldehyde
- Polyurethanes
- Polyphenylene sulphide, known as PPS
- Poly butadiene and Styrene butadiene
Which Industries Benefit
The breadth of the 40-product list reflects how comprehensively petrochemical feedstocks permeate Indian manufacturing across sectors.
Plastics and packaging manufacturers who use polypropylene, polystyrene, PVC, polycarbonates, PET, and polyethylene as primary raw materials get immediate relief on their most significant input costs. The packaging sector, which supplies everything from food packaging to pharmaceutical blister packs to industrial packaging, is among the largest consumers of these materials in India.
Pharmaceutical and chemical manufacturers who depend on methanol, acetic acid, isopropyl alcohol, phenol, and ethylenediamine for synthesis and processing get supply security and cost relief simultaneously. Isopropyl alcohol and methanol are critical solvents across pharmaceutical manufacturing. Acetic acid is a fundamental chemical intermediate.
Textile and fiber manufacturers who use PTA and MEG as the primary feedstocks for polyester fiber and PET bottles get relief on what are typically their two largest raw material cost items. PTA and MEG together account for the majority of the raw material cost in polyester production, making this duty cut particularly significant for India’s large textile manufacturing sector.
Automotive and construction sectors that use epoxy resins, polyurethanes, ABS, polycarbonates, and other engineering polymers for components, coatings, and structural materials benefit from reduced input costs on materials that have seen sharp price increases in the global petrochemical disruption.
Adhesives, coatings, and specialty chemical manufacturers who use vinyl acetate monomer, acrylic polymers, alkyd resins, and formaldehyde derivatives benefit across a wide range of end products from paint to adhesives to surface coatings.
The Condom Manufacturing Connection
Earlier this week Business Upturn reported that India’s condom manufacturing sector, a $860 million industry producing over 400 crore units annually, was facing a shortage driven by silicone oil and petrochemical supply chain disruptions linked to the Iran war. The nil duty notification on petrochemical feedstocks is part of the same government response to the same supply chain crisis, addressing the raw material cost and availability problem across the entire petrochemical-dependent manufacturing ecosystem rather than sector by sector.
What Manufacturers Should Do Now
The nil duty window runs from April 2, 2026 to June 20, 2026, a period of approximately 79 days. Manufacturers who import any of the 40 listed petrochemicals should review their import schedules immediately and consider accelerating procurement during this window to benefit from the zero duty rate while it is in effect. The duty reduction applies to imports under the specific heading or sub-heading numbers listed in the CBIC notification, so importers should verify their tariff classification against the notification before assuming coverage.
For full details and the official tariff heading numbers, refer to CBIC Customs Notification No. 12/2026-Customs dated April 1, 2026, available on the CBIC website at cbic.gov.in.
This article is based on the official CBIC Customs Notification No. 12/2026-Customs dated April 1, 2026, as published by the Ministry of Finance and the Central Board of Indirect Taxes and Customs. Import duty rates are effective from April 2, 2026 to June 20, 2026. Importers are advised to verify applicable tariff headings with their customs broker before importing. This article is for informational purposes only and does not constitute legal or financial advice.
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