REUTERS, New Delhi

India has abolished import tax on petrochemicals used for making plastics ​and pharmaceutical goods after the government invoked emergency powers ‌and diverted local chemicals for production of cooking gas due to shortages caused by the Iran war.

The import tax exemption on ​40 products is valid till June 30, ​according to a government statement on Thursday.

“The government’s decision to grant customs duty exemption on select ​petrochemical products appears aimed at easing cost pressures across ​these downstream industries and providing relief to end consumers amid ongoing global supply disruptions,” said Manish Sejwal, senior vice president ​on the oil trading team at consultancy Rystad ​Energy.

India is a net importer of such petrochemical derivatives though ‌it also produces them domestically using feedstocks such as liquefied petroleum gas, naphtha, and ethane.

Days after the US-Israeli strikes on Iran, the Indian government ordered companies to ​divert locally ​produced petrochemical components to making LPG, mostly used as cooking gas.

India is the world’s No. ​2 importer of LPG, meeting about 60 percent ​of its needs with overseas purchases.

That shift has strained petrochemical producers, which are grappling with tighter feedstock availability, rising prices ​and higher premiums.

Across Asia, plastics ​and packaging manufacturers are already facing surging premiums that are hitting output ​at petrochemical plants.