New Delhi: The Centre’s decision to grant full customs duty exemption on 40 critical petrochemical products for three months until 30 June 2026, government officials said Thursday, would lead to a revenue loss of nearly Rs 1,800 crore.
Speaking at an inter-ministerial briefing on the West Asia conflict, Sanjay Mangal, a member of the Central Board of Indirect Taxes and Customs, said the government’s move aims to ease cost pressures and ensure supply stability.
“This measure has been introduced as a temporary and targeted relief to ensure the continued availability of essential petrochemical inputs for the domestic industry, reduce cost pressures on downstream sectors, and maintain supply stability in the country,” Sanjay Mangal said.
He added, “The relief is expected to benefit sectors like plastics, textiles, pharmaceuticals, chemicals, and automotive manufacturing, while also easing costs for consumers.”
Some of the exempted items include polypropylene, polystyrene, polyols, polybutadiene, styrene butadiene, and anhydrous ammonia.
The government also informed about the conflict’s impact on multiple sectors beyond energy, such as trade in gems and jewellery, engineering goods, agriculture, chemicals, and pharmaceuticals, as well as measures undertaken to support these industries.
Exporters are facing supply chain disruptions, payment delays, higher freight costs, and longer transit times, said Lav Agarwal, Additional Secretary in the Union Ministry of Commerce and Industry.
“West Asia conflict has resulted in challenges like supply chain disruptions, payment delays, increased freight costs, and longer transit times, which are impacting trade, particularly for perishable goods and fertilisers,” he said.
Highlighting sector-specific concerns, Agarwal said the Gulf remained a key market for India’s gems and jewellery trade. “Gold bars and rough diamond imports from GCC (Gulf Cooperation Council) remain under stress, and there are limited diversification options.”
In agriculture, exporters have been dealing with rising freight costs for perishable items, such as fruits and vegetables. Payment channels for basmati rice exports are also under stress, affecting credit cycles.
To address these challenges, the Ministry of Commerce established an inter-ministerial group on 2 March with representatives from Commerce, Ports, the Reserve Bank of India, Finance, External Affairs, Petroleum, Customs, and Railways.
The group meets regularly to monitor the situation and coordinate responses. “Till now, 20 meetings of this inter-ministerial group have taken place,” Agarwal said.
The government has announced several relief measures over the past month. For the gems and jewellery sector, the deadline to meet export obligations for gold and precious metals has been extended by one month. Exporters will also not face penalties for shipment delays linked to the conflict.
To support agricultural exports, the ministry has established a helpline and a WhatsApp group connecting exporters of perishables, basmati rice and meat with air cargo operators and shipping lines to ensure continued movement to Gulf markets.
“Registration cum allocation certificate validity for Basmati exports has been extended by 45 days at no additional cost to exporters,” Agarwal said.
Exporters under the Export Promotion Capital Goods (EPCG) scheme have been given an additional three months—until August 2026—to fulfil their export commitments.
The government has also restored 100 percent of the benefits under the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme—up from 50 percent earlier—to help exporters remain competitive amid rising costs.
“The RoDTEP scheme reimburses central, state, and local taxes for exports. With rates restored from March 23, exporters can handle rising freight, insurance, and input costs while staying globally competitive,” Agarwal said.
On the energy front, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said nearly 12,400 LPG connections have been surrendered so far through a government portal.
She added that nearly 60,000 tonnes of commercial LPG had been supplied since 14 March.
Sharma said eight states had been allocated an additional 10 percent of the commercial LPG supply. This is linked to the ease of doing business conditions for their PNG transition. Three more states are under consideration.
“We have received applications from three more states, and they are under consideration,” she said.
Moreover, according to Sharma, the proposal to expand strategic petroleum reserves is under active consideration, with further updates likely at an appropriate time.
(Edited by Madhurita Goswami)
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