Government gives big relief to fertilizer and chemical industry amid Iran war, customs duty waived on petrochemical products

New Delhi (The Uttam Hindu): The central government has provided major relief to the fertilizer and chemical industry by announcing a waiver on customs duty for several key raw materials, including ammonium nitrate. This exemption will remain in effect from April 2 to June 30.

According to a gazette notification issued by the Ministry of Finance, customs duty on the import of around 40 petrochemical raw materials and intermediate products has been reduced to zero. These include essential chemicals such as ammonium nitrate, methanol, phenol, polyvinyl chloride (PVC), and polypropylene.

The government stated that the decision has been taken in the public interest to ease cost pressures on industries amid global conflict and supply disruptions. Fertilizer companies, in particular, are expected to benefit significantly, as chemicals like ammonium nitrate play a crucial role in fertilizer production. This move is likely to reduce production costs and ease pressure on supply chains.

Additionally, the Agriculture Infrastructure and Development Cess on ammonium nitrate has also been removed, providing further relief to the fertilizer sector. Overall, the decision is being viewed as a cost-relief package for the industry, which may help lower raw material prices, improve supply, and control inflation.

The exemption covers a wide range of chemicals, including basic industrial inputs such as methanol, acetic acid, phenol, toluene, and ammonia, which are widely used across the chemical industry. Duties on petrochemical and plastic raw materials have also been removed, benefiting sectors like packaging, automobiles, electronics, and consumer goods.

These materials are also used in the manufacturing of PVC pipes, paints, coatings, and insulation products. In the automobile sector, they are essential for producing plastic components and seat foam. The pharmaceutical industry also relies on these chemicals, ensuring continuity in drug production.

The removal of duty on ammonium nitrate is expected to ensure adequate fertilizer availability and help stabilize prices, while maintaining smooth supply chains across critical industries.