India enters the second half of 2026 facing an important transition in chemical procurement policy. With the temporary customs duty waiver on key petrochemical imports now expired, the country's first full business week without tariff relief is expected to provide the clearest indication of how manufacturers, industry associations and policymakers intend to respond.

For procurement professionals, the immediate impact extends well beyond customs duties. Plastics converters, textile manufacturers, pharmaceutical companies and automotive suppliers are all reassessing production costs while evaluating how much of the additional expense can be absorbed internally or passed through the value chain.

The Temporary Relief Period Has Ended

The customs duty waiver introduced during the Hormuz disruption provided important cost relief across numerous imported petrochemical products.

By reducing import costs for materials including methanol, styrene, monoethylene glycol (MEG), purified terephthalic acid (PTA), polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), the policy helped manufacturers manage higher international commodity prices during one of the most volatile periods in recent years.

With the waiver now expired, standard import duties once again become part of procurement calculations.

For many businesses, this marks the beginning of a new cost environment rather than a return to pre-crisis market conditions.

Plastics Manufacturers Are Expected to React First

India's plastics converting industry is likely to be among the first sectors responding to higher raw material costs.

As imported polyethylene and polypropylene become more expensive, many processors are expected to review pricing across packaging, consumer goods and industrial products.

Industry associations may begin issuing formal price adjustment notices to downstream customers while manufacturers reassess production margins.

Priority concerns include:

• Increased polymer procurement costs.

• Customer contract renegotiations.

• Inventory valuation adjustments.

• Pricing strategies for domestic and export markets.

These developments will provide an early indication of how quickly higher import costs move through India's manufacturing economy.

Textile Producers Face Rising Feedstock Costs

The textile sector also enters a more challenging procurement environment.

Monoethylene glycol and purified terephthalic acid remain critical feedstocks for polyester fibre production, making tariff changes particularly relevant for textile manufacturers.

Export-oriented apparel producers may experience:

• Higher polyester raw material costs.

• Increased manufacturing expenses.

• Pressure on international pricing competitiveness.

• Greater emphasis on procurement efficiency.

For an industry competing aggressively in global export markets, relatively small changes in feedstock costs can influence overall competitiveness.

Pharmaceutical and Automotive Industries Will Assess Cost Exposure

The impact of duty reinstatement extends beyond traditional petrochemical industries.

Pharmaceutical manufacturers rely on polymer-based packaging materials for many regulated products, making packaging costs an important area of review.

Similarly, automotive Tier-1 suppliers will begin recalculating production costs for polypropylene-based components supplied under long-term agreements with vehicle manufacturers.

Although the direct financial impact may vary by product, procurement teams across both sectors are expected to review supplier pricing and contract terms during the coming weeks.

Government Response Will Be Closely Monitored

Industry groups are expected to engage actively with policymakers as the market adjusts to higher import costs.

Attention will focus particularly on potential announcements from:

• The Department for Promotion of Industry and Internal Trade (DPIIT).

• The Ministry of Finance.

Buyers should monitor whether policymakers introduce sector-specific support measures, targeted duty adjustments or alternative mechanisms designed to reduce pressure on strategically important manufacturing industries.

Any policy response could influence procurement planning throughout H2 2026.

Import Competitiveness Will Shift by Product Category

The reinstatement of import duties does not affect every chemical product equally.

Differences in global production costs, freight economics and supplier pricing mean that competitiveness will now vary more noticeably across individual product categories.

For international suppliers, this creates a more nuanced competitive landscape.

Several trends are likely to emerge:

• Gulf-origin commodity petrochemicals may face slightly reduced price competitiveness on products subject to reinstated duties.

• Chinese suppliers may retain stronger pricing positions in selected downstream and value-added chemical categories.

• Domestic Indian producers could gain modest pricing support where import competition becomes more expensive.

• Specialty chemicals with limited local production are likely to experience less direct impact from the duty changes.

Procurement decisions will increasingly depend on total landed cost rather than export price alone.

Buyers Should Monitor Government Announcements Closely

The first full business week following the expiry of the duty waiver will provide important signals regarding the government's policy direction.

Procurement teams should pay particular attention to:

• Statements from the Department for Promotion of Industry and Internal Trade (DPIIT).

• Ministry of Finance announcements regarding customs policy.

• Industry association representations requesting sector-specific relief.

• Import and customs notifications affecting petrochemical products.

• Changes to tariff schedules or temporary support measures.

Even targeted policy adjustments affecting individual industries could significantly influence procurement decisions throughout H2.

Procurement Strategy Should Focus on Total Cost

The return of import duties reinforces the importance of evaluating procurement using a comprehensive cost framework.

Rather than comparing supplier quotations alone, buyers should consider:

• Product pricing.

• Import duties.

• Ocean freight.

• Marine insurance.

• Inland transportation.

• Inventory carrying costs.

• Currency movements.

This broader approach enables procurement teams to identify the most competitive sourcing option for each product category rather than relying solely on headline prices.

Opportunities Remain for International Suppliers

Although the duty reinstatement slightly changes the competitive landscape, India continues to represent one of the world's largest and fastest-growing chemical markets.

International suppliers with competitive pricing, reliable logistics and strong technical support remain well positioned across numerous market segments.

Companies supplying specialty chemicals, performance materials and products with limited domestic manufacturing capacity are likely to continue benefiting from robust demand despite modest changes in import economics.

For commodity chemicals, success will increasingly depend on efficient logistics, competitive landed costs and close engagement with Indian customers as procurement strategies evolve.

Looking Ahead to H2 2026

India begins the second half of 2026 entering a new phase of chemical procurement following the expiry of the temporary customs duty waiver.

The coming weeks will demonstrate how manufacturers across plastics, textiles, pharmaceuticals and automotive supply chains adapt to higher import costs while maintaining their competitiveness in both domestic and export markets.

For international chemical suppliers, the market remains attractive but increasingly segmented. Product-specific competitiveness, efficient logistics and accurate landed cost calculations will become more important than broad regional pricing advantages. Procurement teams should closely monitor industry responses alongside government policy announcements, as any targeted relief measures could quickly alter sourcing economics for selected chemical categories.

The first full business week without the duty waiver therefore represents more than a policy transition. It is the beginning of a new procurement environment where commercial strategy, regulatory developments and product-level competitiveness will shape India's chemical market throughout H2 2026.

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Dextrose Monohydrate (E1200) CAS: 5996-10-1