Parul
India is on track to establish itself as a global chemicals manufacturing hub, with the potential to attract significant investments in the petrochemical sector, according to Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri. Speaking at the ‘Roundtable on Petrochemical’ during India Chem 2024, the Minister highlighted India’s ambition to leverage its growing economy and burgeoning demand for petrochemical products to become a key player on the global stage.
Currently valued at USD 220 billion, the Indian chemicals and petrochemicals sector is expected to grow to USD 300 billion by 2025, with demand projected to triple by 2040, potentially reaching a staggering USD 1 trillion.
“India, with annual consumption between 25 to 30 million tonnes, is the third-largest economy in Asia, yet its per capita consumption remains much lower than developed countries. This presents an enormous opportunity for growth and investment in the sector,” said Puri.
India is already the sixth-largest chemicals producer globally and the third in Asia, exporting chemicals to more than 175 countries and accounting for 15 per cent of the nation’s total exports. The petrochemical sector, Puri noted, is integral to driving global oil demand growth, with India’s refining capacity projected to grow from 257 million metric tonnes per annum (MMTPA) to 310 MMTPA by 2028.
Government policies and investments to boost petrochemical sector
India’s government is actively fostering an environment conducive to growth in the petrochemical industry. Puri pointed to key initiatives such as the Petroleum, Chemicals, and Petrochemicals Investment Regions (PCPIRs), Plastic Parks, and Textile Parks, all aimed at enhancing production capabilities. These efforts, combined with 100 per cent Foreign Direct Investment (FDI) facilitated through automatic routes, are designed to attract significant international investments.
Under the new PCPIR Policy 2020-35, the government has set a target of ₹10 lakh crore (approximately USD 142 billion) in investments by 2025. Additionally, a projected USD 87 billion in investments is expected over the next decade, reinforcing India’s long-term commitment to the industry.
“The rapid rise of India’s middle class, along with economic growth, will significantly increase the demand for petrochemical products across various sectors, from agriculture to infrastructure,” Puri stated. He also highlighted that the government’s focus on clean energy solutions will further drive demand for innovative petrochemical products.
Focus on sustainability and bridging the import gap
With a substantial 45 per cent dependency on imports for petrochemical intermediates, India aims to reduce this reliance by ramping up local production. This will not only address domestic needs but also strengthen the country’s position as a key player in global petrochemical supply chains.
The specialty chemicals sector, growing at a 12 per cent compound annual growth rate (CAGR), is poised to further transform the Indian economic landscape. Puri underscored the importance of adopting a low-carbon strategy to ensure sustainable development in the sector.
Learning from global hubs
Puri also urged the Indian petrochemical industry to draw lessons from international chemical hubs such as the Port of Antwerp, Port of Houston, and Jurong Island. By creating synergistic clusters, sharing feedstock, and building common facilities for innovation and skill development, India can accelerate its growth trajectory.
A path toward global leadership
With a robust starting point, a growing economy, and supportive government policies, Puri expressed confidence in India’s potential to become a global petrochemical manufacturing hub. He emphasised that with collaboration from both domestic and international investors, the sector will play a pivotal role in achieving India’s $5 trillion economy target and the vision of “Viksit Bharat” by 2047.
The Indian chemical industry already contributes around 6 per cent to the nation’s GDP and provides employment for over 5 million people. As India moves toward a future of sustainable growth, its petrochemical sector will be a cornerstone of industrial and economic development, driving the country’s global ambitions.
