New Delhi: India’s petrochemical sector is expected to witness a steady demand growth of 6-7% annually, from the current levels of about 27 million tonnes in 2025, according a report by CareEdge ratings. Of this, about 8.9 million tonnes were imported, mostly for PVC, Polypropylene and Polyethene.
To address this, domestic petrochemical players are ramping up capacity, with polypropylene capacity set to increase by 1.8 times till FY30, catering to a projected demand of about 1.4 times during the same period. However, domestic players could face competition from cheaper imports from China, which is also expanding its production capacities.
This challenge is set to intensify across product categories in the space, even as global demand may not grow at the same pace as India’s.
India’s petrochemical industry is seeing increasing consumption from the consumer durables, packaging, construction, infrastructure and automobiles sector, strengthened by rising urbanisation and manufacturing capacity. Despite that, domestic players have found it challenging to compete with cheaper imports, and that could become a challenge in the medium term.
India has been increasingly relying on imports from China for its petrochemical products, increasing from 6.3 million tonnes in FY19 and expecting to reach almost 9 million tonnes in 2026. Weak global demand have affected profitability, though this improved marginally in the first half of FY26, mostly due to lower crude prices.
Moving ahead, the growth in petrochemical demand is expected to stay firm, even as import substitution remains a strategic aim under the Aatmanirbhar Bharat initiative.
