Petrochemical Sector Poised for Major Growth, Expected to Reach USD 300 Billion by 2025: Hardeep Singh Puri

Speaking at the 'Roundtable on Petrochemicals' during India Chem 2024, Puri projected that the country’s petrochemical industry could reach a staggering USD 1 trillion by 2040, with demand nearly tripling in the coming decades.

The market size of India's chemicals and petrochemicals sector is on track to expand to approximately USD 300 billion by 2025, up from its current value of USD 220 billion, according to Minister of Petroleum and Natural Gas, Shri Hardeep Singh Puri. Speaking at the 'Roundtable on Petrochemicals' during India Chem 2024, Puri projected that the country’s petrochemical industry could reach a staggering USD 1 trillion by 2040, with demand nearly tripling in the coming decades.

India is currently the sixth-largest chemical producer globally and ranks third in Asia, exporting chemicals to over 175 countries. These exports make up 15% of India’s total outbound trade. However, despite the country's position as Asia’s third-largest economy, its per capita consumption of petrochemicals remains much lower than in developed nations. This presents a significant opportunity for growth and investment, as demand for petrochemical products is set to increase rapidly.

During his address, Puri highlighted the key drivers of growth, such as India's expanding middle class and economy. He pointed out that petrochemicals are vital to numerous industries including agriculture, infrastructure, electronics, and textiles. Additionally, government-backed initiatives, such as the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), Plastic Parks, and Textile Parks, are facilitating 100% Foreign Direct Investment (FDI) through automatic routes.

The petrochemical industry is crucial to the country’s energy transition as India aims to increase its refining capacity from 257 million metric tonnes per annum (MMTPA) to 310 MMTPA by 2028, thereby boosting cost competitiveness. With significant government and private sector investments, including USD 45 billion currently allocated for petrochemical projects and another USD 100 billion anticipated to meet rising demand, the sector is integral to India’s lower-carbon future.

Puri further outlined the government’s vision, underscoring that the new PCPIR Policy 2020-35 aims to attract investments exceeding USD 142 billion (₹10 lakh crore) by 2025. He emphasized that this long-term strategy would contribute to bridging the gap between domestic petrochemical production and imports, as the country is currently dependent on imports for about 45% of its petrochemical intermediates.

In addition to the investments, India’s speciality chemicals sector is seeing rapid growth, with a compound annual growth rate (CAGR) of 12%. This growth is reshaping the economic landscape, but the Minister stressed the importance of adopting a low-carbon strategy to ensure sustainable development.

Drawing lessons from global chemical hubs such as the Port of Antwerp, Port of Houston, and Jurong Island, Puri encouraged the Indian industry to collaborate in clusters, sharing feedstock and creating common innovation facilities to achieve economies of scale. These steps, he said, will help India transform into a global manufacturing hub for chemicals.

With the government’s continued support and collaboration from both domestic and international investors, Puri expressed confidence that India’s petrochemical sector will play a pivotal role in the country’s ambition to become a USD 5 trillion economy. He also reiterated India’s goal of achieving "Viksit Bharat" (Developed India) status by 2047.

In conclusion, the petrochemical and chemical industries, contributing around 6% of the national GDP and employing over 5 million people, are set to drive India’s economic growth over the coming years.