The Year 2024 was a transformative year for India's petrochemical industry, marked by aggressive investments, strategic global partnerships, and a concerted move towards sustainable practices. With a growing demand for petrochemicals fuelled by industrialization, urbanization, and an expanding consumer base, the industry has witnessed a substantial increase in capacity expansions and infrastructure development.  

These developments not only strengthened India's position in the global petrochemical landscape but also set the foundation for future growth aligned with environmental considerations. This growth has been particularly evident in the rise of domestic production capacities, reducing import dependencies and enhancing India’s self-reliance in petrochemicals. 

A major trend shaping the industry during 2024 and continues in 2025 is the shift towards specialty chemicals. Companies are increasingly focusing on developing biodegradable materials, bio-based polymers, and high-value specialty chemicals to meet evolving environmental regulations and customer preferences. The demand for bioplastics and green chemicals has surged, aligning with India’s broader commitment to decarbonisation and circular economy principles. In tandem, petrochemical refiners have integrated renewable feedstocks such as used cooking oil into their processes to produce cleaner fuels.

However, this transition has also necessitated the development of advanced catalysts and refining technologies to handle bio-feedstock impurities effectively. 

Fuelling the Greener Future 

Research and development have emerged as a core focus area for industry players looking to develop alternative feedstocks, innovative production techniques, and high-value petrochemical derivatives. There is a growing emphasis on chemical recycling technologies to convert plastic waste into usable petrochemical feedstocks, fostering sustainability within the sector. Collaborative efforts between government research bodies, academic institutions, and private enterprises have strengthened India’s R&D ecosystem, enabling the industry to compete with global leaders in terms of innovation and technological advancements. 

Digital transformation has played a pivotal role in optimizing business operations, improving efficiency, and enhancing supply chain transparency. Industry 4.0 technologies, including artificial intelligence (AI), the Internet of Things (IoT), and blockchain, have been widely adopted to facilitate predictive maintenance, process automation, and real-time tracking of petrochemical shipments. This has enabled manufacturers to reduce operational costs and improve productivity while ensuring compliance with stringent environmental and safety regulations. 

Substantial Investments and Expansion Plans 

The petrochemicals sector plays a pivotal role in the country's industrial and economic growth, supplying essential raw materials to industries such as plastics, textiles, pharmaceuticals, and agriculture etc. With the sector poised for robust expansion, the Indian government and private enterprises have initiated several key investments and projects to strengthen domestic production, reduce dependency on imports, and enhance sustainability.  

Petroleum Minister Hardeep Puri, at India Chem 2024, highlighted a projected US$ 142 billion (approx. Rs. 11.9 lakh crore) investment in India’s petrochemical sector over the next decade, with FY24–25 serving as a key year for groundwork investments by major players like IndianOil, Bharat Petroleum, Hindustan Petroleum, Oil and Natural Gas Corporation, Oil India, Haldia Petrochemicals, Reliance, Nayara Energy etc.

Bharat Petroleum Corporation Limited (BPCL), for instance, has announced US$ 11 billion (approx. Rs. 95,000 crore) refinery and petrochemical project in Andhra Pradesh. The project will feature a 9 MMTPA refinery and an ethylene cracker unit, designed to strengthen India's petrochemical supply chain and reduce dependency on imported fuels and chemicals.  

Indian Oil Corporation Limited (IOCL) is progressing with expansions of its Panipat, Gujarat, and Barauni refineries, with completion targeted for December 2025. In August 2024, Indian Oil Corporation outlined plans to triple its petrochemical capacity by 2030, starting from 4.28 million tonnes/year. For FY24–25, this includes commissioning a 150,000 tonne/year butyl acrylate plant at its Gujarat refinery, part of a broader Rs. 61,000 crore investment over the next few years. The FY25 capex is estimated at Rs. 10,000–12,000 crore, aligning with refinery and petrochemical integration goals.

Hindustan Petroleum Corporation Limited (HPCL) planned a capex of Rs. 12,000 crore for FY23–24, with a focus on refinery enhancements. For FY24–25, while no new announcement was made in 2024, the company’s ongoing commitment to petrochemicals and sustainability suggests a similar or slightly higher capex, potentially Rs. 12,000–14,000 crore. HPCL’s Rajasthan Refinery which is an integrated refinery and petrochemical complex, is nearing completion. With a total capacity of 9 MTPA, several units have already entered the pre-commissioning phase. HPCL recently expanded the capacity of the Vizag refinery to 300,000 barrels per day and is looking for a further increase.

Oil India Limited’s (OIL) Numaligarh Refinery expansion, totaling Rs. 28,000 crore, is expected to be completed by December 2025. Post its expansion, the refinery’s capacity is expected to increase to 9 million tonne per annum from the present 3 million tonne.

Oil and Natural Gas Corporation (ONGC) has proposed an investment of Rs. 1 lakh crore to set up a 12 MMTPA refinery-cum-petrochemical complex in Uttar Pradesh.

Haldia Petrochemicals Ltd (HPL) is considering a proposal to build a polycarbonate plant in Bengal, entailing an investment upward of Rs. 8,500 crore. Haldia Petrochemicals also plans a Rs. 85,000 crore oil-to-chemical project in Cuddalore, Tamil Nadu. The facility aims to convert crude oil into high-value petrochemicals, specifically ethylene and propylene, with a production capacity of approximately 3.5 million metric tonnes per year. 

Nayara Energy announces plan to invest Rs 68,000 crore to set up a 1.5 MTPA ethane cracker at its 20 MTPA refinery at Vadinar in Gujarat. The company has also strategically planned the development of its petrochemical division in phases and is in the process of setting up a 450 KTPA polypropylene plant at the same location. 

Reliance Industries Limited have also announced capacity expansion projects to cater to the growing demand for petrochemicals, specialty chemicals, and polymer products. Reliance is focusing on high-value petrochemical production to support various downstream industries. 

These expansions are designed to enhance refining capacity and integrate petrochemical production, supporting India's goal to increase its refinery capacity from 249 million tonnes per annum (MTPA) to 450 MTPA.  

Such projects are designed to reduce India’s reliance on imported petrochemical intermediates while catering to the growing domestic and international markets. 

US Tariffs could Create Imbalance 

The tariffs by the Trump administration on imports, particularly from China, could have significant implications for the Indian petrochemical industry. While the direct impact on India might not be as severe as on countries directly involved in the trade dispute, the broader consequences of these tariffs could reverberate throughout global supply chains, raw material pricing, and market competitiveness, posing both risks and opportunities for Indian petrochemical players. 

First, the most immediate impact could stem from disruptions in the availability and pricing of key raw materials. India imports a large portion of its petrochemical feedstock, including products like polyethylene, polypropylene, ethylene, and propylene, from a variety of international sources. With US tariffs affecting Chinese exports, Indian companies might face higher costs for these materials, as Chinese suppliers look to offload surplus production onto other markets. The increased cost of raw materials could squeeze margins for Indian producers, especially in an industry where cost efficiency is critical to maintaining competitive pricing. 

Furthermore, global supply chains will likely experience significant shifts as the US-China trade war intensifies. With China being one of the largest global producers of petrochemical products, its reduced access to the US market could drive the Chinese to redirect their exports to regions like Southeast Asia, Africa, and the Middle East, regions where India also competes. As a result, Indian petrochemical manufacturers could find themselves facing stiffer competition, particularly in markets that were once less crowded. The reconfiguration of supply chains could also lead to a redistribution of demand, impacting the competitiveness of Indian products globally. 

In terms of export opportunities, there might be short-term benefits for Indian petrochemical producers, particularly in markets where Chinese exports become more expensive due to the tariffs. India could capture a portion of this displaced demand in regions where it traditionally has a strong presence, such as the Middle East or Southeast Asia. However, this benefit may be short-lived. 

Countries like South Korea and other Middle Eastern producers could quickly fill the gap left by China, reducing the potential for India to secure lasting market share in these regions. In the US, though Indian products might become more attractive as alternatives to Chinese petrochemicals, the elevated tariffs on US-China trade could also slow overall global demand, making the US a less reliable export market for Indian companies. 

The unpredictability of these trade shifts will also force Indian petrochemical firms to adapt quickly, recalibrating their supply chains and reconsidering long-term investments. Companies may need to look at diversifying their raw material sources, forging new trade partnerships, and exploring new production technologies that could offset higher costs. Additionally, India’s government may be compelled to introduce domestic policy adjustments to buffer the industry, such as tariff reductions on key petrochemical inputs or incentives for companies that invest in expanding local production capacities. 

Outlook

Despite a global slowdown, India remained a bright spot for petrochemical demand in 2025, driven by sectors like electric vehicle components, solar panels, and consumer electronics. Companies like Bharat Petroleum and Indian Oil reported robust domestic demand, highlighting the resilience of the Indian market. 

The sector is on a strong growth trajectory, driven by significant investments, capacity expansions, and sustainability initiatives. This growth is primarily driven by increasing domestic consumption, expanding industrial applications, and supportive government policies. 

The expansion is focused on increasing domestic production capacity, reducing reliance on imports, and incorporating sustainable practices. As the industry moves toward self-sufficiency, investments in innovation and green technologies will play a crucial role in shaping its long-term competitiveness on the global stage.