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PHDCCI urges cut to LTCG tax and customs duty on LNG

11 Nov 2026•3 min read

By the PH Logistics India trade desk · How we write these

In a meeting with Finance Minister Nirmala Sitharaman on Tuesday, the PHD Chamber of Commerce and Industry pressed for major tax reforms. It called for abolishing the 12.5% long‑term capital gains tax, cutting short‑term capital gains tax to 10% and lowering the securities transaction tax. The body also urged the government to drop basic customs duties on LNG, heavy petroleum feedstocks and naphtha.

Key facts

  • Current LTCG tax is 12.5% plus surcharge and cess on gains over Rs 1.25 lakh held >12 months.
  • STCG tax stands at 20% for assets sold within 12 months.
  • PHDCCI proposes reducing STCG to 10% and lowering STT to encourage long‑term investment.
  • It recommends removing the 2.5% basic customs duty on LNG, heavy petroleum feedstocks and naphtha.
  • The chamber seeks to raise PM MUDRA loan limits to Rs 1 lakh (Shishu) and Rs 10 lakh (Kishore).

Background to the recommendations

The PHDCCI argues that high capital‑gains taxes and transaction costs deter long‑term equity investment, limiting growth for Indian manufacturers. By abolishing LTCG and cutting STCG and STT, the chamber believes capital markets will become more competitive and attract deeper funding for exporters and importers.

It also highlights that the current basic customs duty on key energy inputs—LNG, petroleum feedstocks and naphtha—adds to production costs for sectors such as steel, engineering and textiles. Reducing these duties is presented as a way to lower manufacturing costs, strengthen domestic value chains and improve energy security.

What this means for exporters and importers in Punjab

For exporters in Punjab, a lower LTCG tax could make raising equity capital cheaper, enabling expansion of containerised shipments of machinery, auto parts and textiles. Reduced STCG and STT further improve the cost of trading on stock exchanges, potentially increasing funding for new product lines.

Importers of LNG, petroleum feedstocks and naphtha—used by steel plants, engineering firms and textile manufacturers—could see lower landed costs if the 2.5% basic customs duty is removed. This may translate into lower freight‑related expenses and more competitive pricing for finished goods destined for overseas markets.

Mandi Gobindgarh – known as the Steel Town of Punjab, its steel and machinery exporters will benefit from cheaper imported energy inputs if LNG and petroleum duties are cut.

Chandigarh & Mohali – home to engineering and electronics firms that rely on petroleum feedstocks and naphtha for production, making them directly exposed to the proposed duty reductions.

What you can do now

  • Assess how an LTCG abolition could affect future equity financing and plan any share‑issuance strategies accordingly.
  • Verify eligibility for the higher PM MUDRA loan limits and gather required documents to apply for increased working‑capital funding.
  • If you import LNG, petroleum feedstocks or naphtha, calculate current duty costs and model the impact of a zero‑duty scenario for budgeting.

Further reading