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India’s Finance Ministry extended the customs duty exemption on imports of petrochemical products by a further 15 days, pushing the relief window to 15 July from the original 30 June deadline, as authorities look to avoid a disruptive cutoff for manufacturers still leaning on the waiver for feedstock and intermediates.

The exemption was first introduced on 1 April, when supply chain disruptions in West Asia prompted the government to grant full customs duty relief on critical petrochemical imports, and coincided with a period in which domestic oil marketing companies had been directed to prioritise LPG production over other outputs. The conflict left domestic petrochemical supply tighter than usual, and the duty waiver was designed to plug the gap by keeping import costs down for downstream users.

India imports about 90% of its crude, nearly half of which flows through the Strait of Hormuz, a route that remained blocked after the Iran war began at the end of February, and it was this squeeze that originally justified the emergency waiver. Oil prices have since cooled as the US and Iran moved toward peace talks, and easing inflationary pressure has also weakened the case for an interest rate hike by the Reserve Bank of India, both signs the ministry is likely pointing to in framing this extension as transitional rather than open-ended.

With the West Asia situation gradually stabilising, the ministry opted for a short extension rather than an abrupt lapse, and the list of products covered remains unchanged from the original notification. The exempted items stand to benefit from the extra runway, with the government framing the move as both an industrial support measure and a buffer for consumers of finished goods further down the chain.

The extension suggests New Delhi is treating the normalisation as gradual rather than complete, and a further review around the new July 15 deadline looks likely given the incremental nature of this rollback.

Written by: Farid Muzaffar

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India