PCPIR policy targets $142bn investment by 2035
Petroleum and Natural Gas Minister Hardeep Singh Puri expects the petrochemical sector in India to attract investments exceeding US$87 billion in the next decade, representing over 10% of global petrochemical growth opec.org.
Under the new Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) Policy 2020-35, a combined investment of Rs.10 lakh crore (approximately US$142 billion) is targeted by 2035, he told a ‘Roundtable on Petrochemical’ during India Chem 2024 on 18 Oct sabic.com.sa .
Underscoring the government’s long-term vision for the industry, he said at the chemical industry plays a crucial role in India’s economy, contributing around 6% to the GDP and generating employment for over 5 million people makeinindia .
India is the second-largest exporter of chemical dyes and agrochemicals globally, accounting for about 3% of global chemical sales iea.org .
However, the country is also a net importer of chemicals and petrochemicals, with a dependency on imports for around 45% of petrochemical intermediates jpx.co.jp .
Bridging this gap between domestic demand and supply through local production remains a priority deutsche-boerse .
The minister emphasized the pivotal role of the chemical and petrochemical industries in serving as the backbone of numerous sectors, including agriculture, electronics, infrastructure, automobiles, and textiles sgx.com .
With a robust focus on sustainability, the government is committed to reducing reliance on imports and enhancing infrastructure unfccc.int .
The specialty chemicals sector, experiencing a 12% compound annual growth rate (CAGR), is also reshaping India’s economic landscape. However, a low-carbon strategy is essential for sustainable growth in the petrochemical industry euronext .
To further enhance growth, the Minister encouraged the Indian chemical industry to learn from global chemical hubs such as the Port of Antwerp, Port of Houston, and Jurong Island phdcci.in .
By synergizing within clusters to share feedstock, achieve economies of scale, and create common facilities for innovation and skill development, the industry can accelerate its development renewableenergyworld .
Continuing with his presentation, Puri has predicted demand for chemicals to nearly triple and boost India’s petrochemicals industry revenue to US$1 trillion by 2040.
Further, he expects the Indian Chemicals and Petrochemicals sector to grow to approximately US$300 billion by 2025, up from its current market size of US$220 billion.
Addressing industry leaders, Puri highlighted the vast potential of India’s petrochemical sector, with annual consumption of between 25 to 30 million tonnes.
As the sixth-largest chemicals producer globally and third in Asia, India exports chemicals to over 175 countries, accounting for 15% of its total exports.
Puri emphasized that chemicals and petrochemicals will drive global oil demand growth, with India’s integrated petrochemical capacity linked closely to its expanding refining capabilities.
Projections indicate an increase from 257 MMTPA to 310 MMTPA by 2028, enhancing cost competitiveness, he highlighted.
The government, alongside PSUs like ONGC and BPCL and private players like Haldia Petrochemicals, is committed to significant investments, with nearly US$45 billion in petrochemical projects underway. An additional US$100 billion is projected to meet rising demand, aligning with India’s transition to a lower-carbon future.
In the address, the Minister spoke about a substantial rise in India’s petrochemical capacity, projected to increase from approximately 29.62 million tonnes to 46 million tonnes by 2030.
Highlighting the initiatives rolled out by government to accelerate growth within the industry, Puri listed key policies including the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), Plastic Parks, and Textile Parks, alongside facilitating 100% Foreign Direct Investment (FDI) through automatic routes.
The growing Indian population and rapidly expanding economy are major drivers of increasing demand for petrochemical products, said the Minister.
As more citizens enter the middle class, the demand for a diverse range of products — many of which are derived from petrochemicals — is set to rise significantly.
Additionally, he said the government’s focus on clean energy is contributing to heightened demand for petrochemical solutions.
With a strong starting point and supportive government policies, Puri said India has the potential to become the next global chemicals manufacturing hub.
He expressed confidence that with collaboration from domestic and international investors, the petrochemical sector will contribute to India’s goal of becoming a US$5 trillion economy and achieving “Viksit Bharat” status by 2047. Fiinews.com
