What key factors are helping India's petrochemical industry remain resilient despite global headwinds like Middle East energy cost surges and overcapacity?

India's petrochemical industry is anchored by a robust 7.4% national GDP growth forecast for FY 2025–2026, integrated producers' use of dual-feed steam crackers to dynamically shift between fuels and chemical derivatives, a landmark US–India trade agreement slashing chemical tariffs from 50% to 18%, and strong domestic demand driving the market past $300 billion and contributing 8.1% to manufacturing Gross Value Added (GVA) in FY2024.

How is India addressing supply constraints and boosting domestic capacity in key petrochemical segments like olefins, vinyls, and specialty chemicals?

In olefins, ethylene capacity is on track to exceed 9.5 million tonnes/year by 2027, while GAIL’s 500,000 tonne/year propane dehydrogenation (PDH) and polypropylene (PP) project in Usar is spurring domestic propylene capacity expansion; in vinyls and chloralkali, the government rescinded mandatory Quality Control Orders (QCOs) for ethylene dichloride (EDC) and vinyl chloride monomer (VCM), removing historic import bottlenecks and supporting projected demand of 835,000 tonnes for EDC and 1.61 million tonnes for VCM in FY2026; in specialty chemicals, the sector reached $64.5 billion with a 10–12% CAGR, and R&D investment is shifting toward high-purity semiconductor chemicals, chemical plastic recycling, and green hydrogen synthesis.

APIC ’26: India petchems anchored by strong domestic demand – CPMA

May 29, 2026

CPMA reports at APIC 26 that India's petrochemical market reached $300B, driven by 7.4% GDP growth and US tariff reductions, with ethylene capacity set to exceed 9.5 million tonnes by 2027.

icis

2026-05-29

APIC ’26: India petchems anchored by strong domestic demand – CPMA

APIC ’26: India petchems anchored by strong domestic demand – CPMA

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