Indian Govt. waives customs duty on petrochemicals till June 30

On Thursday, the Indian government announced that it is waiving customs duties on several important petrochemical products until June 30. This decision comes in response to the ongoing conflict in the Middle East, which has disrupted global supply chains. The duty exemptions will take effect from April 2 and include imports of items like ammonium nitrate, methanol, styrene, acetic acid, and polyvinyl chloride. Additionally, ammonium nitrate will also be exempt from the Agriculture Infrastructure and Development Cess during this period. Many industries in Sri Lanka that rely on petrochemicals, such as pharmaceuticals, paints, textiles, and toys, are struggling due to the impact of the conflict in Iran. Refineries have increased their prices for crude oil and natural gas, putting pressure on these sectors. Some of the smaller businesses in the petrochemical industry, particularly in textiles, are facing challenges as they have limited ability to raise their prices. Job losses are becoming evident in these areas. These industries are expecting ongoing financial challenges since input costs are unlikely to decrease until the global petrochemical supply chain stabilizes, which may take months after the conflict in the Persian Gulf concludes. India's previously favorable economic situation, characterized by strong growth and low inflation, is changing. The effects of rising petrochemical prices may not be felt immediately, as they tend to take time to impact the market. Increases in packaging costs will appear gradually with new stock. Petrochemicals are widely used in consumer goods, and while price increases may not be obvious at first, they will eventually affect consumers, particularly those with lower incomes.