By: ICN Bureau
Last updated : October 18, 2024 8:50 pm
Puri says that India has potential to become global chemicals manufacturing hub at India Chem 2024
The market size of the Indian chemicals and petrochemicals sector is expected to grow to approximately US$ 300 billion by 2025, up from its current market size of US$ 220 billion, said India's Petroleum Minister 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$1 trillion by 2040.
Addressing industry leaders, Puri highlighted the vast potential of India’s petrochemical sector. With annual consumption between 25 to 30 million tonnes, India stands as Asia's third-largest economy, exhibiting a per capita consumption significantly lower than developed nations. This gap presents ample opportunities for demand growth and investment.
As the sixth-largest chemicals producer globally and third in Asia, India exports chemicals to over 175 countries, accounting for 15% of its total exports. Puri emphasized that chemicals and petrochemicals will drive global oil demand growth, with India’s integrated petrochemical capacity linked closely to its expanding refining capabilities. Projections indicate an increase from 257 MMTPA to 310 MMTPA by 2028, enhancing cost competitiveness.
The government, alongside PSUs like ONGC and BPCL and private players like Haldia Petrochemicals, is committed to significant investments, with nearly US$ 45 billion in petrochemical projects underway. An additional US$ 100 billion is projected to meet rising demand, aligning with India’s transition to a lower-carbon future.
Puri 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.
The Minister said that the petrochemical sector in India is projected to attract investments exceeding US$ 87 billion in the next decade, representing over 10% of global petrochemical growth. Under the new PCPIR Policy 2020-35, a combined investment of Rs. 10 lakh crore (approximately US$ 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.
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.