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, previously set at 7.5 percent, has been reduced to zero on materials including purified terephthalic acid (PTA) and monoethylene glycol (MEG), both critical inputs for the production of synthetic fibers.
This relief will remain in effect for April, May, and June. Industry representatives in Surat said this 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 that crude prices have nearly doubled in the past month, leading to a rise of up to 30 percent in yarn prices.
"With the customs duty reduced to zero, production costs are expected to decline by 5 to 10 percent. We are already seeing this impact, with yarn producers reducing prices by up to Rs 7 per kilogram," he said, adding that this is a positive development for the synthetic fiber sector.
Bhavin Vora, Director of Polymer Bazaar, said that raw material prices had risen by 50 to 60 percent between March 1 and March 10, making it difficult for several units to fulfill 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 yarn trader based in Surat, said that 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 percent on the yarn market," he said.
Lalit Sharma, a 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 facing high yarn prices and logistical challenges, this decision provides much-needed relief. It will help stabilize prices and give the industry breathing space during the slowdown," he said.
Industry stakeholders said that the temporary duty reduction could help restore order flows and ease working capital stress, although they noted that longer-term stability would depend on global price trends and supply chain conditions.