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Surat Industries Get Cost Relief as Centre Cuts Petrochemical Import Duty to Zero

The Central government has eliminated the basic customs duty on over 40 key petrochemical raw materials for three months to alleviate cost pressures on Surat's industries. The move, prompted by soaring global crude oil prices, is expected to reduce production costs by 5-10% for sectors like man-made fibre. Industry representatives have welcomed the decision, noting immediate price reductions in yarn and PET resin. The relief is seen as crucial for helping MSMEs regain export competitiveness amid high input costs and supply chain disruptions.

Key Points: Centre Slashes Duty on Petro Raw Materials, Aids Surat Industries

  • Duty cut on 40+ raw materials
  • Relief for textiles & plastics
  • Aims to counter high crude prices
  • Expected 5-10% cost reduction
  • Temporary measure for April-June
2 min read

Surat industries get breather as Centre slashes duty on petro raw materials

Central govt cuts customs duty to zero on key petrochemical inputs for 3 months, offering cost relief to Surat's textile and plastics sectors.

"With the customs duty reduced to zero, production costs are expected to decline by 5 to 10 per cent. - Nikhil Madrasi"

Surat, April 3

The Central government has reduced the basic customs duty on more than 40 key petrochemical raw materials to zero for a period of three months, a move expected to ease cost pressures on Surat's textile and plastics industries amid rising global input prices.

The duty, earlier set at 7.5 per cent, has been cut to nil on materials including purified terephthalic acid (PTA) and monoethylene glycol (MEG), both critical inputs for man-made fibre production.

The relief will remain in place for April, May, and June. Industry representatives in Surat said the decision comes at a time when rising crude oil prices, linked to geopolitical tensions, have sharply increased production costs.

Nikhil Madrasi, President of the Southern Gujarat Chamber of Commerce and Industry, said crude prices have nearly doubled over the past month, leading to a rise of up to 30 per cent in yarn prices.

"With the customs duty reduced to zero, production costs are expected to decline by 5 to 10 per cent. The impact has already started to show, with yarn producers reducing prices by up to Rs 7 per kilogram," he said, adding that the move is a positive development for the man-made fibre sector.

Bhavin Vora, Director of Polymer Bazaar, said raw material prices had risen by 50 to 60 per cent between March 1 and March 10, making it difficult for several units to execute existing orders.

"Major producers have already reduced PET prices by up to Rs 5.5. This is a commendable step by the government, particularly for MSME units," he said.

Pradeep Parikh, a Surat-based yarn trader, said lower input costs would help small and medium enterprises regain competitiveness in export markets.

"This decision could have a direct positive impact of 7 to 10 per cent on the yarn market," he said.

Lalit Sharma, textile trader and President of the Textile Youth Brigade, pointed to ongoing disruptions in exports due to tensions affecting key shipping routes, including the Strait of Hormuz.

"At a time when weavers were under pressure from high yarn prices and logistical challenges, this decision provides much-needed relief. It will help stabilise prices and give the industry breathing space during the slowdown," he said.

Industry stakeholders said the temporary duty reduction could help restore order flows and ease working capital stress, though they noted that longer-term stability would depend on global price trends and supply chain conditions.

- IANS

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Reader Comments

P
Priya S
Good step, but why only for three months? The global situation is so volatile. By the time the industry adjusts, the duty will be back and cause another shock. The government should consider a longer-term policy for essential industrial inputs to ensure stability for our exporters.
R
Rohit P
Finally some relief! My father runs a small weaving unit in Surat. The last month was terrible with yarn prices going up daily. This decision will directly help us quote better prices to our buyers. Hope the benefit is passed down the entire chain to the smallest weaver. Jai Gujarat! 🇮🇳
S
Sarah B
As someone who follows the textile industry, this is a smart, targeted fiscal move. Reducing duty on PTA and MEG addresses the core of the problem. It shows the government is listening to ground reports from chambers like SGCCI. This should help control inflation in synthetic fabrics too.
A
Aman W
The real issue is our dependence on imported petrochemicals. While this duty cut helps now, we need to focus on 'Aatmanirbhar Bharat' in this sector. Investing in domestic production of these key raw materials will provide permanent insulation from global price shocks.
K
Kavya N
Excellent news for Surat's economy! The textile and plastic industry employs lakhs of people directly and indirectly. Stabilizing their input costs means job security for many families. Hope the lower yarn prices translate to more affordable clothing for consumers as well. 👍

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