India’s petrochemical sector is poised to remain a bright spot in 2025, despite global headwinds from oversupply and weak margins, according to industry leaders at India Energy Week. Demand growth is being fueled by electric vehicle (EV) components, solar panels, household appliances, and white goods.

India’s Strong Domestic Petrochemical Demand

India’s annual petrochemical consumption currently stands at 25-30 million metric tons, with the market valued at ₹19.06 lakh crore ($220 billion). The industry is expected to reach ₹26 lakh crore ($300 billion) by 2025, driven by rapid industrialization, urbanization, and increasing domestic manufacturing.

According to Bharat Petroleum’s Director of Refineries, Mr. Sanjay Khanna, key sectors such as propylene-based manufacturing are witnessing strong demand growth, while Indian Oil Chairman, Mr. A S Sahney, affirmed continued resilience in petrochemical demand throughout 2025.

Key Growth Drivers: EV Components, Solar Panels, and White Goods

1. Electric Vehicles (EVs) – Petrochemicals are essential in EV batteries, lightweight materials, and insulation for wiring. With India’s EV adoption rising, the demand for specialty chemicals and polymers is also growing.
2. Solar Panels – The push for renewable energy has increased demand for polymers and coatings used in solar panels.
3. Household Appliances & White Goods – TotalEnergies’ Global Head of Petrochemical Trading, Mr. Ganesh Gopalakrishnan, highlighted that appliance and automobile sector recovery is further driving petrochemical demand.

Global Challenges: Weak Margins and China’s Slow Demand

Despite strong domestic demand, global petrochemical margins remain weak due to:

• China’s sluggish economic recovery, which has reduced consumption.
• Excess supply from new petrochemical plants in China and the Middle East, leading to low product prices and pressure on global markets.

Industry experts await China’s new incentive plan in March, which could help boost demand and stabilize margins.

How Indian Refiners Stay Resilient

Unlike standalone petrochemical plants relying on imported feedstock, Indian refiners benefit from in-house petrochemical production, insulating them from negative margins. According to Rystad Energy Analyst Mr. Pankaj Srivastava, standalone plants have been struggling with losses for three to four years due to high import costs and pricing pressures.

Massive Investments in India’s Petrochemical Sector

India is witnessing significant investments in the petrochemical industry, with ₹7.54 lakh crore ($87 billion) planned over the next decade to meet rising demand.

Key projects include:

• Petronet LNG – 750,000 metric tons-per-year propane dehydrogenation unit and 500,000 tpy polypropylene plant in Gujarat.
• Nayara Energy & Haldia Petrochemicals – Expanding petrochemical capacity to strengthen India’s supply chain.
• Indian Oil, Bharat Petroleum, and Reliance Industries – Ongoing expansion projects to cater to domestic and export markets.

Petronet LNG’s Chief Executive, Mr. Akshay Kumar Singh, expects petrochemical margins to recover within three years, aligning with rising demand and infrastructure growth in India.

Conclusion: India’s Petrochemical Market Remains a Key Growth Sector

Despite global oversupply and weak margins, India’s petrochemical sector remains robust, driven by EVs, solar energy, and manufacturing. With significant investments and domestic demand growth, India will continue to be a critical player in the global petrochemical industry.

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