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Economics April 22, 2026 6 min read Daily brief · #28 of 33

DPIIT rolls out multi-sectoral regulatory relaxations to bolster industrial supply chains

The Department for Promotion of Industry and Internal Trade (DPIIT) announced a package of multi-sectoral regulatory relaxations to ensure uninterrupted supp...

GS Paper 3 (Indian Economy Industry Infrastructure Trade)

What Happened

  • The Department for Promotion of Industry and Internal Trade (DPIIT) announced a package of multi-sectoral regulatory relaxations to ensure uninterrupted supply of fuel, gas, and essential industrial raw materials across key sectors.
  • On gas infrastructure: 467 applications for Compressed Natural Gas (CNG) and Compressed Biogas (CBG) dispensing stations have been processed since late March 2026, with approval timelines reduced to under 10 days; 157 final licences and 38 prior approvals were issued for new dispensing units.
  • On kerosene storage: temporary storage relaxations were granted — up to 2,500 litres of superior kerosene oil, plus a one-time additional relaxation of 5,000 litres of PDS (Public Distribution System) kerosene to ensure last-mile supply continuity.
  • On ammonium nitrate: a ban on exports was imposed in March 2026 to secure domestic availability for industrial users, particularly the fertiliser and explosives sectors.
  • On industrial boilers: high-capacity boilers in power plants, refineries, and fertiliser units received three-month temporary extensions on their operational certificates, subject to external safety inspections.
  • On customs duties: Basic Customs Duty (BCD) on EVA (ethylene vinyl acetate) and key polymers used in the leather, footwear, and tyre industries was reduced to zero; a full customs duty exemption on 40 specified petrochemical feedstocks and polymers was granted (effective April 2 to June 30, 2026).
  • Sectoral allocations were also addressed: the glass industry's piped natural gas (PNG) supply was set at 80% of average consumption; the paint industry's industrial LPG allocation was raised to 70% of pre-March levels; induction cooktop manufacturers received extended Quality Control Order (QCO) timelines to meet energy efficiency standards amid supply disruptions.

Static Topic Bridges

DPIIT — Mandate and Role in Industrial Regulation

The Department for Promotion of Industry and Internal Trade (DPIIT) operates under the Ministry of Commerce and Industry and is the primary regulatory authority for industrial development, licensing, foreign direct investment policy, intellectual property rights, and internal trade facilitation in India. DPIIT administers several key legislations including the Industries (Development and Regulation) Act, 1951 (IDR Act), the Petroleum and Explosive Safety Organisation (PESO) framework, and quality control orders under the Bureau of Indian Standards Act.

  • DPIIT issues licences for explosive-related activities (including ammonium nitrate storage and transport) and regulates petroleum storage through PESO.
  • Quality Control Orders (QCOs) under BIS Act mandate that specified products conform to Indian Standards; DPIIT can extend QCO implementation timelines in exceptional circumstances.
  • DPIIT coordinates with the Ministry of Finance for customs duty adjustments and with the Ministry of Petroleum and Natural Gas for fuel supply matters.

Connection to this news: The regulatory relaxations announced span DPIIT's core competencies — PESO-regulated explosive and petroleum storage, BIS quality standards, and customs tariff coordination — demonstrating the department's role as a cross-sectoral industrial facilitator in supply chain emergencies.

Compressed Natural Gas (CNG) and Compressed Biogas (CBG) — India's Clean Fuel Strategy

CNG is natural gas compressed for use as a vehicle fuel and industrial energy source, while CBG is biogas (produced from organic waste) compressed to similar specifications. India's National Bioenergy Programme and SATAT (Sustainable Alternative Towards Affordable Transportation) initiative aim to replace fossil CNG with CBG at scale — targeting 5,000 CBG plants by 2023–24 (an ongoing initiative). Dispensing stations for CNG and CBG require PESO authorisation and environmental clearances.

  • CBG is produced from agricultural residue, municipal solid waste, sewage, and industrial effluents — making it a circular economy solution.
  • The SATAT scheme offers long-term purchase agreements to CBG producers through state PSUs.
  • Faster approval timelines for CNG/CBG stations directly support the expansion of clean transportation infrastructure, especially in cities and industrial corridors.
  • 41 biogas cylinder filling and storage plants received approval; licences were issued to 14 plants as part of the same push.

Connection to this news: The DPIIT's acceleration of CNG/CBG station approvals — 467 applications processed with sub-10-day turnaround — is a regulatory facilitation measure to prevent supply-side disruptions as demand for cleaner fuels grows, particularly in transport and energy-intensive manufacturing.

Ammonium Nitrate — Export Controls and Strategic Industrial Importance

Ammonium nitrate is a critical chemical compound with dual-use applications: as a nitrogen-based fertiliser in agriculture and as a component in industrial explosives used in mining, infrastructure construction, and quarrying. In India, ammonium nitrate is governed by the Explosives Act, 1884, and the Ammonium Nitrate Rules, 2012. Given its dual-use nature and explosive risk, ammonium nitrate is a controlled substance, and its trade is monitored. Export bans on ammonium nitrate are a standard supply security tool used globally when domestic demand exceeds supply.

  • Ammonium nitrate is classified as a hazardous material; its storage, transportation, and import/export require PESO licensing.
  • India imports a significant portion of ammonium nitrate from key producers; any global supply disruption can trigger domestic shortages.
  • Export restrictions on ammonium nitrate are exercised under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992.
  • The Beirut port explosion (2020) involving improperly stored ammonium nitrate heightened global attention to its regulation.

Connection to this news: The March 2026 export ban on ammonium nitrate reflects proactive supply-chain management — prioritising domestic industrial and agricultural users (particularly the fertiliser sector) during a period of potential external supply uncertainty, consistent with India's strategic industrial policy framework.

Customs Duty as an Industrial Policy Tool

Customs duties in India are levied under the Customs Act, 1962, and the Customs Tariff Act, 1975. The government uses Basic Customs Duty (BCD) adjustments as a targeted industrial policy instrument — reducing duties on key inputs to lower production costs for downstream industries, or raising duties to protect domestic producers. Temporary duty exemptions or reductions are typically notified through customs notifications issued by the Ministry of Finance on the recommendation of the DPIIT or sector-specific ministries.

  • BCD reduction to zero on EVA and polymers benefits labour-intensive industries like leather, footwear, and tyres — which are also significant export sectors.
  • The 40-item petrochemical feedstock duty exemption (April 2–June 30, 2026) provides a time-limited relief window to help industry rebuild inventory and manage production costs.
  • Such duty adjustments are distinct from anti-dumping measures and are typically reviewed and renewed based on domestic capacity utilisation data.

Connection to this news: The customs duty relaxations form part of a broader DPIIT package aimed at maintaining industrial output during a period of supply chain stress — using tariff policy as a lever to reduce input cost pressures on downstream manufacturing sectors.

Key Facts & Data

  • Nodal department: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
  • CNG/CBG applications processed: 467 (since late March 2026); turnaround reduced to under 10 days
  • CNG/CBG licences issued: 157 final licences + 38 prior approvals
  • Kerosene storage relaxation: Up to 2,500 litres superior kerosene oil; one-time 5,000 litres for PDS kerosene
  • Ammonium nitrate export ban: Imposed March 2026 to secure domestic supply
  • Boiler certificate extensions: 3-month temporary extensions for high-capacity boilers in power plants, refineries, and fertiliser units (subject to inspection)
  • Customs duty changes: BCD reduced to zero on EVA and key polymers; 40 petrochemical feedstocks fully exempted (April 2–June 30, 2026)
  • Glass industry: PNG supply set at 80% of average consumption
  • Paint industry: Industrial LPG allocation raised to 70% of pre-March levels
  • QCO extension: Induction cooktop manufacturers given extended timelines to meet energy efficiency standards
  • Relevant laws: IDR Act 1951, Explosives Act 1884, Customs Act 1962, Foreign Trade (Development and Regulation) Act 1992, Ammonium Nitrate Rules 2012
  • Regulatory body for PESO: Petroleum and Explosives Safety Organisation, under DPIIT
On this page
  1. What Happened
  2. Static Topic Bridges
  3. DPIIT — Mandate and Role in Industrial Regulation
  4. Compressed Natural Gas (CNG) and Compressed Biogas (CBG) — India's Clean Fuel Strategy
  5. Ammonium Nitrate — Export Controls and Strategic Industrial Importance
  6. Customs Duty as an Industrial Policy Tool
  7. Key Facts & Data
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