In a move aimed at easing supply chain pressures and supporting domestic downstream industries, India has temporarily eliminated basic customs duties (BCD) on a wide range of petrochemicals. The exemption, effective from April 2 through June 30, 2026, covers critical PU raw materials, including Toluene, TDI, MDI, Polyols, and PU systems, commodities that are largely import-dependent and in high demand across India's automotive, construction, furniture, and consumer goods sectors.
The exemption does not alter existing anti-dumping duties, which remain country-specific and continue to apply where applicable. Importers may benefit from the duty relief on eligible products during the three-month window, provided no other trade measures are triggered.
A Historic Price Rally
The duty relief comes at a time when India's polyurethane raw material markets are operating at historic price levels. Since the escalation of the Middle East crisis, India has been one of the most affected markets in the region. Key contributing factors include:
Sharp increases in crude oil and feedstock prices
Supply disruptions from major exporting regions
Freight costs nearly double for India-bound shipments
China's VAT export rebate cancellation, which took effect on April 1
As a result, prices for TDI, MDI, and Polyether Polyols in India have surged to unprecedented levels over the past month, placing significant cost pressure on downstream manufacturers.
Cost Relief with Supply Constraints
The temporary duty exemption is expected to lower landed costs for key raw materials during the exemption window, offering much-needed relief to domestic converters and end-users. However, the actual impact on import volumes and pricing will depend heavily on availability from exporting regions.
Major suppliers in China, South Korea, and the Middle East are themselves navigating tight feedstock availability, elevated production costs, and logistical uncertainties. While the duty relief improves the cost equation for Indian buyers, securing incremental volumes may remain challenging in the current global supply environment.
For the Polyurethane Industry, this three-month window offers an opportunity to ease input costs, though the extent of actual benefit will be shaped by global supply conditions and production costs.