Plastic, MMF Sectors See High Input Costs Despite Customs Duty Exemption

Manufacturers in the plastic and man-made fibre (MMF) textile sectors have not experienced a decline in input costs following the Customs Duty exemption on 40 petrochemical products. Industry representatives indicate that the relief anticipated from the policy has not reflected in pricing so far.

“With the Customs Duty exemption for PTA and MEG, which are the main raw materials for the MMF textile sector, the yarn prices should have reduced at least 5%. But, it has not happened,” said former president of the Southern Gujarat Chamber of Commerce and Industry Ashish Gujarati. MMF stakeholders held a meeting with the Textile Commissioner and reiterated their demand for a reduction in raw material prices, he said.

Textile mill sources stated that while polyester prices have declined, yarn prices are expected to adjust in the coming days.

According to Anil Reddy Vennam, senior vice president of the All India Plastic Manufacturers Association, the raw mater­ial prices went up 65 % in the first 15 days of the U.S.­Israel, Iran war. The latest was on April 2 though the gov­ern­ment announced a waiver of Cus­toms Duty on 40 pet­ro­chem­ical products. Input prices for the plastic industry have seen ₹86/kg hike since the war star­ted.

The rise in input costs has led to higher prices for several plastic products, including shampoo sachets and biscuit covers. He also stated that public sector undertakings supplying raw materials have increased their prices.

Nearly 90% of plastic manufacturers in India operate within the MSME sector, with approximately 50,000–75,000 industries functioning in the organised segment.

Industry participants are currently in discussions with international suppliers for raw material procurement. However, they remain cautious about finalising agreements due to delivery timelines exceeding one month and uncertainty over future price levels.

At present, domestic raw material prices in India are higher than international prices in the plastics sector, which has had a significant impact on production, he said.