Petrochemicals customs duty relief in India may ease packaging costs for FMCG and cement

Several manufacturing sectors, from consumer goods to cement, are looking for cost relief after fresh pressure on inputs. Many companies faced higher production and packaging bills amid tensions in West Asia. The government has now removed Basic Customs Duty on selected petrochemical imports. Industries said the step could ease costs across supply chains and support stable pricing.

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The duty waiver was announced on Thursday to steady supplies during the West Asia crisis. The exemption applies to imports of key petrochemical feedstock and intermediates. It is expected to help plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components, and other manufacturing users. Industry executives said the change may reduce volatility in input costs.

Customs duty exemption on petrochemical products

The government exempted Basic Customs Duty on several petrochemical products till June 30, 2026. The listed items include Methanol, Anhydrous ammonia, Toluene, Styrene, Dichloromethane methylene chloride, Vinyl chloride monomer, Poly butadiene, Styrene butadiene and Unsaturated polyester resins. Companies said these materials affect both direct inputs and packaging-linked expenses.

Petrochemicals are widely used to make plastics, which are key for packaging. Lower import costs may reduce the price of packaging materials used by FMCG, retail, and consumer goods firms. Executives also said cheaper plastics and resins can benefit other sectors. These effects can spread through transport, storage, and product protection needs.

Petrochemical products and cement sector costs

JK Lakshmi Cement President & Director Arun Shukla said the governments move offers relief to manufacturers. The exemption covers a wide set of petrochemical products till June 30, 2026. Shukla said uncertainty in global prices and supply chains had raised risk for input planning. Shukla added that the step should improve stability in input costs.

Shukla said petrochemicals are not core to cement making, yet they matter in operations. Polymers like polypropylene and polyethylene are used for packaging and some value-added uses. Shukla said lower prices for such materials can improve efficiencies in cement dispatch. Shukla also said the move cushions industry from external pressures while supporting construction activity.

Petrochemical products and consumer goods pricing

Parle Products Vice President Mayank Shah said companies are still assessing the effect of the duty change. "There are precisely three costs which have been impacted. One was the conversion, the production cost, the second was packaging, and the third was price. All three were affected,\" Shah said. Shah said falling input rates could help avoid price increases.

Industry participants said the exemption aims to protect users of final products by ensuring supply stability. They added that any cost easing in plastics, resins, and synthetic materials can support downstream production. If import-led prices soften, manufacturers may be able to hold current price points. The measure remains in force till June 30, 2026.

With inputs from PTI