Restored Import Duty Lifts India’s Local PVC Prices, While PP and PE Stay Under Pressure

India’s polymer markets have taken different directions after the government allowed the temporary zero-duty regime on nearly 40 polymers and chemical intermediates to expire on July 16, restoring the standard 7.5% Basic Customs Duty (BCD) on imports.

The return of import duties immediately strengthened the PVC market, which depends heavily on imported material. In contrast, PE and PP continued to face pressure from abundant domestic supply, weak monsoon-season demand, and aggressive competition from imported cargoes.

PVC Gains Strongest Support from Restored Import Duty

PVC experienced the biggest impact following the restoration of the 7.5% Basic Customs Duty. India relies on imports to meet a significant share of its PVC demand, making the market highly sensitive to changes in import costs.

With imported material becoming more expensive, domestic producers gained greater pricing power. A major Indian producer increased Suspension PVC prices by INR3,000/ton ($31/ton) and PVC fitting compound prices by INR4,000/ton ($42/ton), reflecting the higher replacement cost of imported cargoes.

PE Market Remains Weak Despite Return of Import Duty

Unlike PVC, India has sufficient domestic PE production capacity, resulting in comfortable supply levels. Combined with slow buying activity during the monsoon season and high inventory levels, the market remained under pressure.

Instead of raising prices after the import duty returned, major producers reduced HDPE and LDPE prices by INR4,000/ton ($42/ton) to improve sales, while LLDPE prices remained largely unchanged after earlier price protection schemes were withdrawn.

PP Continues to Struggle Amid Weak Demand

The PP market also failed to benefit from the restored import duty. Domestic prices were largely unchanged as weak demand prevented producers from implementing increases.

Meanwhile, competitive offers from China and the Middle East forced Indian suppliers to lower PP deemed export prices by INR6,000/ton ($62/ton) to remain competitive.

At the same time, the return of the 7.5% Basic Customs Duty has increased the cost of certain imported feedstocks and raw materials. However, sluggish demand has made it difficult for producers to pass these higher costs on to buyers, keeping profit margins under pressure.

Different Supply Dynamics Shape Market Response

The restoration of the 7.5% Basic Customs Duty has once again highlighted the different fundamentals across India's polymer markets.

In PVC, where the country remains heavily dependent on imports, higher import costs quickly translated into stronger domestic prices. However, PE and PP continue to be influenced mainly by local supply-demand conditions, with abundant production, comfortable inventories, and weak seasonal demand outweighing the impact of the restored import duty.

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