By: ICN Bureau
Last updated : December 26, 2025 10:05 am
Major paint makers grappled with compressed margins, softer urban demand and fierce price-based competition as consumers increasingly traded down to value offerings in FY2025
India’s paints and coatings industry is on track for a sharp expansion, but not without growing pains as rising competition and margin stress redefine the game.
Valued at about $9.6 billion in 2024, the sector is projected to grow at a CAGR of 9.4% through 2030 and reach nearly $16.5 billion in the next five years, according to Rubix Data Sciences’ latest Industry Insights. Yet FY2025 emerged as a clear inflection point, laying bare intensifying competition, margin pressure and structural stress across the value chain.
Long-term demand drivers remain firmly in place. Rapid urbanisation, rising disposable incomes, sustained infrastructure spending and expanding housing construction continue to underpin growth. India’s status as the world’s third-largest automobile market — and its ambition to claim the top spot within five years — is also fuelling steady demand for automotive and industrial coatings, strengthening the medium-term outlook.
Despite these tailwinds, FY2025 proved difficult even for market leaders. Major paint makers grappled with compressed margins, softer urban demand and fierce price-based competition as consumers increasingly traded down to value offerings. Aggressive discounting and higher dealer incentives eroded profitability, marking a shift from a historically stable, brand-led industry to a far more contested marketplace.
The strain is most severe among the nearly 3,000 small and unorganised paint manufacturers operating nationwide. Rising compliance costs tied to environmental and low-VOC regulations, limited capacity to invest in R&D and innovation, and the absence of strong marketing and distribution networks are pushing many smaller players to the brink. For this segment, survival itself has become a challenge, with growth largely out of reach.
Competition has further intensified with the entry of new players and a wave of consolidation. The arrival of Grasim Industries’ Birla Opus, JSW Paints and Pidilite’s Haisha Paints, alongside deals such as JSW Paints’ acquisition of Akzo Nobel India, Astral’s purchase of Gem Paints and JK Cement’s takeover of Acro Paints, has reshaped the industry. These moves have accelerated capacity expansion, disrupted dealer relationships and heightened pricing pressure across both incumbents and smaller manufacturers.
On the trade front, India remains a net importer of paints, underlining its reliance on advanced industrial coatings and critical raw materials such as titanium dioxide and specialised resins. Imports touched $219 million in the first half of FY2026 — more than three times exports of $61 million in the same period.
While India largely exports to developing markets, it continues to import high-performance coatings from developed economies. Solvent-based products still dominate, accounting for 84% of exports and 75% of imports, even as eco-friendly, low-VOC paints gradually gain traction. Though trade is not a key growth driver, the imbalance highlights gaps in domestic high-performance coating capabilities and the growing importance of technology and scale.
Looking ahead, the industry’s fundamentals remain strong. Central government housing programmes such as Pradhan Mantri Awas Yojana – Urban and Pradhan Mantri Awas Yojana – Gramin are expected to provide a sustained boost. At the same time, the shift towards eco-friendly, low-VOC and high-performance coatings, coupled with the adoption of advanced materials and nanotechnology, is set to reshape product portfolios and competitive strategies.
The report concludes that while India’s paints and coatings industry is well positioned for long-term growth, the road ahead will be defined by scale, compliance readiness, technology investment and distribution strength. Near-term pressures may persist, but companies that adapt swiftly to the evolving competitive and regulatory landscape are likely to emerge stronger in the next phase of expansion.