New Delhi
India’s petrochemical consumption growth is expected to remain robust at 6–7 per cent per annum in the medium term, driven by sustained economic expansion and rising demand for downstream products, according to a report released on Monday. The outlook underscores the sector’s critical role in supporting India’s manufacturing ecosystem and its broader transition toward a more consumption-driven economy.
The report highlighted that petrochemicals form the backbone of several industries, including packaging, textiles, automotive, construction, electronics and consumer goods. With India’s economy continuing to expand and urbanisation gaining momentum, demand for petrochemical-derived products such as plastics, polymers, synthetic fibres and specialty chemicals is projected to rise steadily over the coming years.
One of the key drivers of growth is the increasing consumption of packaged food, personal care products and pharmaceuticals, all of which rely heavily on petrochemical inputs. Additionally, infrastructure development and housing activity are expected to boost demand for materials like pipes, insulation, paints and coatings, further supporting petrochemical usage. The expansion of the automotive sector, particularly electric vehicles, is also contributing to higher demand for lightweight plastic components and advanced polymer materials.
The report noted that India’s per capita petrochemical consumption remains significantly lower than that of developed economies and even some emerging markets. This gap indicates substantial headroom for growth as incomes rise and consumption patterns evolve. As a result, India is likely to remain one of the fastest-growing petrochemical markets globally in the medium term.
On the supply side, domestic producers are ramping up capacity through new projects and expansions to meet rising demand and reduce import dependence. Several integrated refinery and petrochemical complexes are under development, reflecting a strategic shift toward value-added downstream products. This aligns with the government’s broader objective of strengthening domestic manufacturing and improving self-reliance in critical industrial inputs.
However, the report also cautioned that the sector faces challenges, including feedstock availability, volatility in crude oil prices, environmental regulations and the global push toward sustainability and circular economy practices.
