PHDCCI Seeks Customs Duty Cuts On Key Industrial Inputs To Boost Manufacturing Competitiveness

The PHD Chamber of Commerce and Industry (PHDCCI) has proposed customs duty cuts on key industrial raw materials and energy inputs. The proposals aim to reduce manufacturing costs and improve India’s global competitiveness.

In its recommendations for the Union Budget 2027-28, the industry body outlined five measures. These aim to strengthen domestic supply chains, improve energy security and support sectors such as steel, fertilisers, aluminium, petrochemicals, textiles and engineering.

PHDCCI President Anil Gupta said high energy and feedstock costs raise production expenses. They also affect investment decisions and weaken the competitiveness of downstream industries. He stressed the need for affordable access to essential industrial inputs.

First, PHDCCI proposed cutting Basic Customs Duty (BCD) on Liquefied Natural Gas (LNG) from 2.5% to zero. India imports nearly 50% of its natural gas requirements. The proposed cut could benefit fertiliser plants, power producers, steelmakers and petrochemical companies.

Second, the chamber recommended removing the 2.5% duty on heavy petroleum feedstocks, including fuel oil, vacuum residue and vacuum gas oil. This could give refiners greater flexibility in sourcing raw materials.

Third, it sought to eliminate the 2.5% duty on naphtha, a key feedstock for plastics, chemicals and synthetic materials.

Fourth, PHDCCI proposed reducing the duty on calcined petroleum coke from 7.5% to 2.5%. It recommended a similar cut on raw petroleum coke, from 10% to 2.5%, to support aluminium manufacturers.

Finally, it urged the government to retain the existing customs duty framework on steel scrap beyond March 2028, ensuring predictable raw material supplies.

PHDCCI Secretary General and CEO Dr Ranjeet Mehta said a balanced tariff policy could strengthen supply chains, attract investment and boost domestic value addition.

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