Petrochemical Industry in India info - Chemical Man

The importance of Petrochemicals is immense. Although we might not realize it but our lives are dependent to quite a large extent on petrochemicals. Petrochemicals are very much a part and parcel of our day to day lives - the carpets that we use to decorate our homes, plastic bottles, clothes that we wear, fertilizers that we use to grow crops, tires paints, pharmaceuticals, cosmetics etc are made up of some kind of petrochemicals.

Petrochemical Industry in India

The petrochemical industry in India has been one of the fastest growing industries in the country. Since the beginning, the Indian petrochemical industry has shown an enviable growth rate. This industry also contributes largely to the economy of the country and the growth and development of manufacturing industry as well. It provides the foundation for manufacturing industries like construction, packaging, pharmaceuticals, agriculture, textiles etc.

The Indian petrochemical industry is a highly concentrated one and is oligopolistic in nature. Even till a few days back, only four major companies viz. Reliance Industries Ltd (RIL), Indian Petrochemicals Corporation Ltd. (IPCL), Gas Authority of India Ltd. (GAIL) and Haldia Petrochemicals Ltd. (HPL) used to dominate the industry to a large extent. The recent amalgamation of IPCL with RIL has made the industry more concentrated further, as they jointly account for over 70% of country's total petrochemical capacity. However, the scene is a bit different for the downstream petrochemical sector, which is highly fragmented in nature with over 40 companies existing in the market.

The Characteristics of Indian Petrochemical Industry

The Petrochemical Industry in India is a cyclical industry. This industry, not only in India but also across the world, is dominated by volatile feedstock prices and sulky demand. India has one of the lowest per capita consumptions of petrochemical products in the world. For example, the per capita consumption of polyester in India lies at 1.4 kg only comparing to 6.6 kg for China and 3.3 kg for the whole world. Similarly, the per capita consumption of polymers is 4 kg in India, whereas the per capita consumption is around 20 kg for the whole world.