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