India is taking a bold step into the global petrochemical arena. According to S&P Global Ratings, the country is investing INR 3, 28,227 crore (about USD 37 billion) to expand its petrochemical capacity. The move is aimed at minimizing import dependence and increasing local production.

The report, titled "First China, Now India," highlights India's shift towards self-reliance in the sector. The country aims to become a major global supplier, following China's previous expansionist strategy.

Public sector undertakings (PSUs) will lead the investment in refinery projects with INR 2, 21,775 crore (USD 25 billion). Meanwhile, private players are putting in another INR 1, 06,452 crore (USD 12 billion). The combined push will help India fulfill the rising demand for chemicals used in plastics, textiles and auto parts.

Domestic Demand to Cushion Oversupply Risks

Analysts expect some pressure on global prices due to possible overcapacity. However, India’s strong domestic market could shield its producers from the worst effects. 

Polyethylene, an extensively used plastic, is in particularly high demand in India. By 2030, the country is set to overtake the United States to become the world’s second-largest consumer of polyethylene.

This rising appetite will help local companies stay profitable, even if global prices fall. On the other hand, Asia-Pacific exporters could feel the heat as India and China minimize their imports.

More than half of the region’s chemical exports currently go to these two countries. With tariffs limiting access to the U.S. market, exporters could struggle to find new buyers, potentially leading to a consolidation in the industry.

India’s Strategic Shift Could Reshape Global Supply

India’s push is not just on domestic demand. It is a clear indication of its ambitions to become a global petrochemical powerhouse.

This massive investment is expected to add about a third of global capacity by 2030. As India flexes its industrial muscle, the balance of power in the chemical supply chain could shift.

While challenges remain, particularly in managing global supply dynamics, India’s strong local market and strategic vision place it in a strong position moving forward.

India’s INR 3.28 lakh crore petrochemical investment marks a crucial step toward self-reliance. With rising demand and smart planning, it’s poised to become a global leader by 2030.