Mumbai: The Indian Chemicals and Petrochemicals sector is set for remarkable expansion, with projections estimating the market size to reach approximately USD 300 billion by 2025, up from USD 220 billion, according to Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri.

Addressing industry leaders at the ‘Roundtable on Petrochemical’ during the India Chem 2024 conference, Puri highlighted the vast potential and growing demand for chemicals in the country, which could nearly triple in the coming years. Furthermore, he predicted that the petrochemicals industry could soar to a staggering USD 1 trillion by 2040.

Puri noted that India, as Asia’s third-largest economy, currently consumes between 25 to 30 million tonnes of petrochemicals annually, but its per capita consumption remains significantly lower than that of developed nations.

“This disparity presents substantial opportunities for growth and investment, as the nation seeks to bolster its chemical manufacturing capabilities,” he said.

Puri emphasised that the chemical and petrochemical sectors are critical to driving global oil demand growth.

An official statement from the Ministry of Petroleum said India’s integrated petrochemical capacity is closely linked to its refining capabilities, projected to increase from 257 million metric tonnes per annum (MMTPA) to 310 MMTPA by 2028, enhancing the sector’s cost competitiveness.

Currently, nearly USD 45 billion is allocated to various petrochemical projects, with an additional USD 100 billion expected to be invested to meet rising demand, aligning with the country’s transition to a lower-carbon future, it said.

Puri also mentioned a substantial increase in petrochemical capacity, which is expected to rise from approximately 29.62 million tonnes to 46 million tonnes by 2030.

To facilitate this growth, the government has introduced several key initiatives, including the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), Plastic Parks, and Textile Parks. Additionally, the government is facilitating 100% Foreign Direct Investment (FDI) through automatic routes to attract global capital, it added.

The burgeoning Indian population and a rapidly expanding middle class are significant drivers of increasing demand for petrochemical products. As more citizens attain middle-class status, the demand for a wide array of petrochemical-derived products is anticipated to surge, the statement said.

Puri underscored the government’s focus on clean energy, further contributing to the heightened demand for petrochemical solutions.

Puri highlighted the importance of the chemical and petrochemical industries as the backbone of numerous sectors, including agriculture, electronics, infrastructure, automobiles, and textiles. He emphasised the need for a low-carbon strategy for sustainable growth in the petrochemical sector, particularly in the rapidly growing specialty chemicals segment, which is experiencing a 12 per cent compound annual growth rate (CAGR).

Puri urged stakeholders to learn from global chemical hubs such as the Port of Antwerp, Port of Houston, and Jurong Island. Puri expressed confidence that with collaboration from domestic and international investors, the petrochemical sector will play a crucial role in achieving India’s goal of becoming a $5 trillion economy and realizing the vision of “Viksit Bharat” by 2047.