TaxTMI 
TaxTMI 
The Government of India, through the Directorate General of Foreign Trade (DGFT), has issued Notification No. 25/2026-27 dated 24 July 2026, introducing a significant amendment to the import policy governing Suspension Grade Polyvinyl Chloride (S-PVC) Resin under ITC (HS) Code 39041020. Published in the Gazette of India Extraordinary, Part-II, Section-3, Sub-Section (ii), the notification revises the import status of S-PVC resin from 'Free' to 'Restricted,' while simultaneously introducing a Minimum Import Price (MIP) mechanism. The amendment has come into force with immediate effect and is expected to have far-reaching implications for domestic manufacturers, importers, exporters, and downstream industries.
Understanding the Notification
The notification has been issued under the powers conferred by Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with Paragraphs 1.02 and 2.01 of the Foreign Trade Policy (FTP), 2023, as amended from time to time.
Prior to this amendment, imports of Suspension Grade PVC Resin under ITC (HS) Code 39041020 were freely permitted without any pricing restrictions. However, the revised policy categorizes the item as 'Restricted' and imposes a specific condition linked to the import value.
According to the notification, imports of Suspension Grade PVC Resin having a Cost, Insurance and Freight (CIF) value exceeding USD 0.766 per kilogram will continue to be permitted freely for a period of six months from the date of publication of the notification. Imports below this threshold will fall under the 'Restricted' category and would require compliance with the applicable licensing requirements under the Foreign Trade Policy.
What is Suspension Grade PVC Resin?
Suspension Grade PVC Resin is one of the most widely used thermoplastic polymers in the world. It serves as a key raw material in manufacturing a diverse range of products, including:
PVC pipes and fittings
Electrical conduits and cable insulation
Window and door profiles
Flooring materials
Medical devices
Packaging products
Films and sheets
Consumer goods
India's rapidly expanding construction, infrastructure, agriculture, healthcare, and electrical sectors have significantly increased the demand for PVC resin. Since domestic production has not always matched demand, India has relied heavily on imports from countries such as China, Taiwan, Japan, South Korea, the United States, and several Middle Eastern nations.
Purpose Behind Introducing the Minimum Import Price
The introduction of a Minimum Import Price (MIP) is generally aimed at preventing imports at exceptionally low prices that may adversely affect domestic manufacturers. When imported products enter the market at prices substantially lower than prevailing international or domestic market prices, domestic producers often face pricing pressure, reduced profitability, and underutilization of manufacturing capacity. The MIP seeks to discourage such low-priced imports while allowing imports at commercially reasonable prices. By fixing the threshold at USD 0.766 per kilogram (CIF), the Government intends to ensure that imports entering India reflect fair market values and do not distort competition. The measure is temporary and will remain effective for six months, allowing the Government to assess market conditions before deciding whether to continue, modify, or withdraw the restriction.
Impact on Domestic Manufacturers
The notification is expected to provide considerable relief to domestic PVC resin manufacturers. Indian producers have repeatedly highlighted concerns regarding low-priced imports affecting their competitiveness. With the introduction of the MIP, domestic manufacturers may benefit in several ways:
Reduced pressure from low-cost imports.
Better capacity utilization.
Improved pricing stability.
Enhanced investment confidence.
Greater encouragement for expansion of domestic manufacturing.
The measure also aligns with the Government's broader objective of promoting domestic manufacturing under initiatives such as 'Make in India' and reducing excessive dependence on imported industrial raw materials.
Impact on Importers and Downstream Industries
The notification is likely to have mixed implications for importers and industries dependent on PVC resin.
Importers sourcing material below the prescribed CIF value may now need to obtain the required import authorization, potentially increasing compliance requirements and affecting procurement timelines.
For downstream manufacturers producing pipes, fittings, packaging materials, cables, films, and consumer products, the policy may result in:
Higher procurement costs if cheaper imports become unavailable.
Greater dependence on domestic suppliers.
Temporary adjustments in supply chains.
Possible increase in production costs.
However, imports above the prescribed threshold remain freely permissible during the six-month period, which helps maintain availability of the raw material for genuine industrial users.
Exemptions Provided Under the Notification
Recognizing the importance of export-oriented manufacturing, the Government has carved out important exemptions from the Minimum Import Price requirement.
The MIP shall not apply to imports made by:
100% Export Oriented Units (EOUs)
Units located in Special Economic Zones (SEZs)
Imports under the Advance Authorisation Scheme
These exemptions are subject to one important condition: the imported inputs must not be sold in the Domestic Tariff Area (DTA).
This ensures that exporters continue to enjoy duty-free access to internationally priced raw materials without affecting the domestic market. It also preserves India's export competitiveness in sectors that utilize PVC resin as an input.
Policy Rationale
The amendment reflects the Government's attempt to strike a balance between protecting domestic manufacturing and ensuring uninterrupted availability of essential industrial inputs. Unlike an outright import ban, the Minimum Import Price mechanism provides flexibility by allowing imports that meet the prescribed value threshold while discouraging imports at unusually low prices.
Such calibrated trade measures are commonly employed to address temporary market distortions without completely restricting international trade. The six-month validity also indicates that the Government intends to monitor market developments before making any long-term policy decision.
Challenges Ahead
While the notification offers protection to domestic producers, several practical challenges may arise during implementation. Determining the correct CIF value for imported consignments will require careful customs assessment and documentation. Importers may also need greater clarity regarding valuation procedures to avoid disputes.
Industries dependent on imported PVC resin may experience short-term cost pressures if international prices remain below the prescribed threshold. Smaller manufacturers with limited sourcing options could be particularly affected.
Additionally, market participants will closely monitor domestic supply capacity to ensure that local production can adequately meet demand during the restriction period.
Conclusion
DGFT Notification No. 25/2026-27 marks an important intervention in India's trade policy relating to Suspension Grade PVC Resin. By introducing a Minimum Import Price of USD 0.766 per kilogram and revising the import policy from 'Free' to 'Restricted,' the Government aims to safeguard domestic manufacturers against low-priced imports while maintaining adequate availability of the material for industrial use.
The exemption granted to Export Oriented Units, SEZ units, and Advance Authorisation holders demonstrates the Government's commitment to supporting exports without compromising the objectives of domestic industry protection. As the measure is valid for six months, its effectiveness will depend on market response, domestic production levels, global PVC pricing trends, and its impact on downstream manufacturing sectors.
Overall, the notification represents a balanced trade policy initiative intended to promote fair competition, strengthen domestic manufacturing capabilities, and ensure sustainable growth of India's plastics and polymer industry while preserving export competitiveness.
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