SINGAPORE (ICIS)--The Indian petrochemical industry could see around $87bn worth of new projects as the country moves to bridge the gap between the shortage of domestic supply and increasing consumer demand, a government official said on Tuesday.
The projects currently under consideration include Nayara Energy's $20bn complex at Vadinar in Gujarat which could house a cracker and downstream units for polypropylene (PP), polyethylene (PE), benzene, cumene and monoethylene glycol (MEG), said Yogendra Tripathi, Secretary, Department of Chemicals & Petrochemicals, Ministry of Chemicals and Fertilizers.
Source: Presentation slide by Yogendra Tripathi at the India Chem 2021 conference
Tripathi was speaking to delegates at the India Chem 2021 conference being held at New Delhi.
Another future investment currently being studied is Haldia Petrochemical's $10bn integrated complex at Balasore, Orissa, which is slated to produce 1.6m tonnes/year of paraxylene (PX) and 1.25m tonnes/year of purified terephthalic acid (PTA).
Around 11 projects worth around $17bn are scheduled to be completed by 2024 in India.
India’s petrochemicals market is expected to surge to $300bn by 2025 from $178bn in 2020, expanding at a compounded annual growth rate of about 11% over the next five years.
“The government of India has been consistently looking at policy options and rationalising the duties structure with the view to encourage domestic production,” Tripathi said.
Growth drivers for India’s chemicals market include low per capita consumption, increasing export demand and fresh government initiatives, he said.
“Opportunities exist across the whole value chain, across the whole sector, especially so in polyvinyl chloride (PVC) and methanol due to the gap in demand and supply,” Tripathi said.
The government is promoting domestic manufacturing projects via policy initiatives such as the Production Linked Incentive Scheme aimed at boosting domestic manufacturing and exports by providing incentives on incremental sales from products made at domestic plants, he said.
The scheme has the potential of adding at least another $55bn of production over the next five years across all manufacturing sectors, according to Tripathi.
“This will lead to a quantum jump in the demand for chemicals... such as polymers, resins, fibres, bulk chemicals, paints, pigments, food additives, etc,” he said.
Some $1.4 trillion of new infrastructure projects in India are set to be completed by 2025, Tripathi added.
Focus article by Nurluqman Suratman