India Waives Import Tax on Petrochemicals Amid Supply Crisis Triggered by Iran Conflict

India has abolished import duties on key petrochemical inputs used in the production of plastics and pharmaceutical goods, invoking emergency powers to manage supply disruptions linked to the ongoing Iran conflict. The government’s decision follows a directive to divert domestically produced petrochemical components toward liquefied petroleum gas (LPG) production, as the country grapples with shortages in cooking fuel. The exemption applies to 40 products and will remain in effect until June 30, according to an official statement released on Thursday.

The move is expected to ease cost pressures across downstream industries that rely heavily on petrochemical derivatives. Analysts suggest that the temporary tax relief will help stabilize prices for manufacturers and ultimately benefit consumers facing rising costs. Manish Sejwal, senior vice president at Rystad Energy, noted that the decision is aimed at mitigating the impact of global supply disruptions while supporting industries dependent on these inputs.

India, the world’s second-largest importer of LPG, meets nearly 60% of its demand through overseas purchases. The recent shift in domestic production priorities has tightened feedstock availability for petrochemical producers, leading to increased prices and higher premiums. Across Asia, manufacturers in plastics and packaging sectors are already experiencing the strain, with production output affected as supply constraints ripple through the region.

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