Petroleum Minister Hardeep Puri Highlights India’s Petrochemical Potential at India Chem 2024

The market size of the Indian Chemicals and Petrochemicals sector is expected to grow to approximately USD 300 billion by 2025, up from its current market size of USD 220 billion, said Shri Hardeep Singh Puri while addressing the ‘Roundtable on Petrochemical’ during India Chem 2024 today. He said that the demand for chemicals is predicted to nearly triple and the petrochemicals industry in India may reach US$1 trillion by 2040.

Addressing industry leaders, Shri Hardeep Singh Puri highlighted the vast potential of India’s petrochemical sector. With annual consumption between 25 to 30 million tonnes, India stands as Asia’s third-largest economy, exhibiting a per capita consumption significantly lower than developed nations. This gap presents ample opportunities for demand growth and investment.

As the sixth-largest chemicals producer globally and third in Asia, India exports chemicals to over 175 countries, accounting for 15% of its total exports. Shri Puri emphasized that chemicals and petrochemicals will drive global oil demand growth, with India’s integrated petrochemical capacity linked closely to its expanding refining capabilities. Projections indicate an increase from 257 MMTPA to 310 MMTPA by 2028, enhancing cost competitiveness.

The government, alongside PSUs like ONGC and BPCL and private players like Haldia Petrochemicals, is committed to significant investments, with nearly USD 45 billion in petrochemical projects underway. An additional USD 100 billion is projected to meet rising demand, aligning with India’s transition to a lower-carbon future.

In the address, the Minister, spoke about a substantial rise in India’s petrochemical capacity, projected to increase from approximately 29.62 million tonnes to 46 million tonnes by 2030.

Highlighting the initiatives rolled out by government to accelerate growth within the industry, the Minister mentioned about key policies including the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), Plastic Parks, and Textile Parks, alongside facilitating 100% Foreign Direct Investment (FDI) through automatic routes.

The growing Indian population and rapidly expanding economy are major drivers of increasing demand for petrochemical products, said the Minister. As more citizens enter the middle class, the demand for a diverse range of products—many of which are derived from petrochemicals—is set to rise significantly. Additionally, he said the government’s focus on clean energy is contributing to heightened demand for petrochemical solutions.

The Minister said that the petrochemical sector in India is projected to attract investments exceeding USD 87 billion in the next decade, representing over 10% of global petrochemical growth. Under the new PCPIR Policy 2020-35, a combined investment of ₹10 lakh crore (approximately USD 142 billion) is targeted by 2025, underscoring the government’s long-term vision for the industry.

The chemical industry plays a crucial role in India’s economy, contributing around 6% to the GDP and generating employment for over 5 million people. India is the second-largest exporter of chemical dyes and agrochemicals globally, accounting for about 3% of global chemical sales. However, the country is also a net importer of chemicals and petrochemicals, with a dependency on imports for around 45% of petrochemical intermediates. Bridging this gap between domestic demand and supply through local production remains a priority.

Minister emphasized the pivotal role of the chemical and petrochemical industries in serving as the backbone of numerous sectors, including agriculture, electronics, infrastructure, automobiles, and textiles. With a robust focus on sustainability, the government is committed to reducing reliance on imports and enhancing infrastructure.

The specialty chemicals sector, experiencing a 12% compound annual growth rate (CAGR), is also reshaping India’s economic landscape. However, a low-carbon strategy is essential for sustainable growth in the petrochemical industry.

To further enhance growth, the Minister encouraged the Indian chemical industry to learn from global chemical hubs such as the Port of Antwerp, Port of Houston, and Jurong Island. By synergizing within clusters to share feedstock, achieve economies of scale, and create common facilities for innovation and skill development, the industry can accelerate its development.

With a strong starting point and supportive government policies, Shri Puri said India has the potential to become the next global chemicals manufacturing hub. He expressed confidence that with collaboration from domestic and international investors, the petrochemical sector will contribute to India’s goal of becoming a $5 trillion economy and achieving “Viksit Bharat” status by 2047.