Big relief for paint industry: Govt slashes duty to zero amid Iran tensions

India has moved swiftly to cushion the impact of rising West Asia tensions involving Iran on key domestic industries, with the government announcing a series of targeted relief measures - including zero basic customs duty on critical inputs for the paint sector - while assuring that fuel supplies remain stable despite global disruptions.

At an inter-ministerial briefing on Wednesday, officials said the steps are aimed at stabilising supply chains, ensuring uninterrupted industrial activity and preventing panic amid concerns over energy flows through the Strait of Hormuz. The government also confirmed that refineries are operating at full capacity with adequate crude inventory, even as commercial LPG supply remains under pressure but is gradually improving.

Duty cut to zero

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In a major relief move, the government has reduced the basic customs duty (BCD) to zero on key raw materials - HDPE, LLDPE and PPCP - through a notification dated April 1, 2026.

These materials are essential for paint manufacturing, and the decision is expected to ease input shortages triggered by supply disruptions linked to the West Asia crisis.

Officials said the Department for Promotion of Industry and Internal Trade (DPIIT) had flagged industry requirements to the Ministry of Petroleum and Natural Gas (MoPNG) on April 8 and April 13. Following this, Indian Oil Corporation’s refineries at Mathura and Vadodara were directed to supply butyl acrylate equivalent to 0.2 TMT per day of propylene to support production.

Additionally, quality control norms for butyl acrylate have been temporarily relaxed until July 10, 2026, to boost domestic availability.

LPG allocation raised from 50% to 70%

To further support industry, the allocation of industrial LPG has been increased from 50 per cent to 70 per cent of pre-March 2026 bulk consumption levels.

This step is particularly significant for paint manufacturers, who rely heavily on LPG as a fuel input.

The government has also ensured supply of petrochemical feedstock by mandating refineries to provide minimum quantities of critical C3 and C4 streams for key sectors.

Relief extended to tyre, glass and ceramic sectors

The support measures go beyond paints, covering multiple industries affected by supply disruptions:

Tyre industry: Basic customs duty cut to zero on key chemicals such as polybutadiene and styrene butadiene rubber

Glass industry: PNG allocation fixed at 80 per cent of average consumption; LPG allocation also increased

Ceramic sector (Morbi): Fresh notification issued to ensure PNG supply continuity and address pricing disparities

Officials said these interventions are designed to maintain production continuity across sectors that depend heavily on imported petrochemical inputs and fuel.

Fuel supply stable, refineries running at full capacity

Despite global concerns, the government stressed that India’s energy situation remains under control.

“All refineries are operating at high capacity and crude inventories are adequate,” officials said, adding that petrol and diesel supplies remain stable across retail outlets.

To protect consumers from global price volatility, the government has also reduced excise duty on petrol and diesel by Rs 10 per litre.

Commercial LPG supply improves, domestic gets priority

While domestic LPG supply continues to be prioritised, commercial LPG availability - which had been impacted - is now improving.

Officials said:

• Over 51 lakh domestic LPG cylinders were delivered on April 21
• Around 94 per cent of deliveries are now authenticated through DAC (Delivery Authentication Code) to prevent diversion
• Total commercial LPG allocation has been raised to about 70 per cent of pre-crisis levels

To meet rising demand, more than 1,31,879 MT of commercial LPG - equivalent to over 69.4 lakh 19 kg cylinders has been supplied in April so far.

Crackdown on black marketing: 3,200 raids, cylinders seized

Authorities have intensified enforcement to curb hoarding and black marketing.

In recent days:

• Over 3,200 raids were conducted across the country
• More than 2000 LPG cylinders were recovered

Additionally, penalties have been imposed on 290 LPG distributors, with 68 distributorships suspended.

PNG expansion and alternate fuel push

The government is also accelerating the shift towards alternative fuels to reduce LPG dependency:

• Around 5.10 lakh PNG connections have been activated since March
• Infrastructure created for an additional 2.56 lakh connections
• Over 5.77 lakh consumers registered for new PNG connections

Industries and households are being encouraged to adopt PNG, induction cooktops and other cleaner fuels. On the logistics front, the Indian-flagged crude oil tanker Desh Garima, carrying 31 Indian seafarers, safely crossed the Strait of Hormuz on April 18 and is expected to reach Mumbai on Wednesday evening.

Officials confirmed that no incidents involving Indian vessels have been reported in the past 24 hours, and India remains in constant touch with regional authorities to ensure safe passage of ships.

India backs peace amid Iran tensions

Amid escalating tensions involving Iran, India reiterated its support for diplomacy and de-escalation.

Officials said New Delhi has welcomed the extension of the ceasefire and continues to monitor developments closely, particularly their impact on global energy supply chains.