The Directorate General of Foreign Trade (DGFT) last week imposed a minimum import price (MIP) on Suspension Grade Polyvinyl Chloride (S-PVC) Resin, requiring imports priced at USD 0.766 per kg or below to obtain a DGFT import licence in addition to applicable duties. The measure will remain in force for six months, according to the notification.
Measure Details
Imports priced above the MIP threshold will continue to be freely imported after payment of applicable customs duties. The current customs duty structure for S-PVC imports includes 7.5% Basic Customs Duty (BCD) and 0.75% Social Welfare Surcharge (SWS), bringing total customs duty to 8.25% (excluding IGST). With 5% IGST, the minimum landed cost is approximately USD 0.87 per kg, according to GTRI Founder Ajay Srivastava.
| Duty Component | Rate |
|---|---|
| Basic Customs Duty (BCD) | 7.5% |
| Social Welfare Surcharge (SWS) | 0.75% |
| Total Customs Duty (excl. IGST) | 8.25% |
| IGST | 5% |
| Minimum Landed Cost (approx.) | USD 0.87/kg |
Impact on Prices and Imports
"The move is expected to increase domestic PVC resin prices but is unlikely to reduce India's heavy dependence on imports," Srivastava said. He noted that since every major supplier ships below the DGFT threshold of USD 0.766 per kg, almost the entire existing import trade now falls within the restricted category unless suppliers increase their declared prices. "The principal impact of the notification is expected to be higher on domestic PVC resin prices rather than lower imports," he added.
Domestic Production vs Demand
India's annual PVC resin consumption is around 4.7 million metric tonnes (MMT), of which S-PVC accounts for about 4.5 MMT (96%). Domestic production capacity is only 1.7 MMT, led by Reliance Industries, Chemplast Sanmar, and DCM Shriram, meeting just 36% of domestic demand. As a result, India imports about 3.0 MMT of S-PVC resin every year — representing roughly 64% of its S-PVC requirement — so the DGFT notification is unlikely to significantly reduce imports despite increasing their cost, Srivastava said. The heavy import dependence means that even with higher landed costs, domestic buyers will continue to rely on foreign supplies, given the production deficit of 2.8 MMT. Importers and downstream industries, such as pipe and cable manufacturers, will face increased input costs, potentially squeezing margins unless they pass on the higher prices to consumers. The six-month window of the measure suggests the government may reassess its impact before deciding on an extension.
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