 "Investment opportunity of $30 bn in petrochemical sector: Hardeep Puri")
India offers investment opportunity of USD 30 billion in the petrochemical sector over the next decade as the world's third largest energy consumer looks to meet growing demand, Oil Minister Hardeep Singh Puri said on Friday.
Addressing Asia Petrochemical Industry Conference 2023 here, the minister highlighted that the size of the Indian chemical and petrochemcial sector is around USD 190 billion and it is poised for transformational growth.
He rued that the per capita consumption is still low as compared to developed economies.
Puri noted that the petrochemical sector has made a significant progress in recent years, becoming one of the largest producers of petrochemical products in the world.
"The market size of the Indian chemical and petrochemical sector I'm told is about USD 190 billion. The per capita consumption of various chemical products and segments is significantly lower compared to the developed economies. And this gap offers substantial space for demand growth and investment opportunities," he said.
The minister said the chemicals and petrochemicals demand in India is expected to nearly triple and is expected to reach USD 1 trillion by 2040.
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"There is a potential investment opportunity of USD 30 billion in next decade in petrochemical sector. And the government of India is proactively addressing the present challenges and implementing several flagship initiatives to improve the overall competitiveness quality and output of the industry," he said.
Stating that this sector supports the Prime Minister's initiative of 'Make in India' and make for the world, Puri said that the chemical and petrochemicals sector can transform India into a global manufacturing hub.
"India today is not only the sixth largest chemical producer in the world, and the fourth in Asia, but also exports chemicals to more than 175 countries. It accounts for 13 per cent of India's total exports," he added.
The minister noted that the growth of the petrochemical industry in India has been driven by several factors, including increasing demand for such products from a growing population and a rapidly expanding economy.
"As more and more people in India move into the middle class, they are demanding a wide range of products, many of which are made using petrochemicals," he said.
Further, Puri said that Indian petrochemical industry has come a long way from the inception in the 1970s and is poised for transformational growth.
"It is expected to contribute almost 10 per cent of incremental growth in the global petrochemical demand in the coming years," he added.
The minister highlighted some policy changes that have been made to boost the sector and improve the ease of doing business, including 100 per cent FDI through automatic routes, Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) and set up of infrastructure such as 10-plus plastic parks, etc.
"The proposed new PCPIR policy will be implemented between 2020-35 and is expected to attract an approximate combined investment of over Rs 34 lakh crore..," he said.
Puri pointed out that India's import dependency on petrochemical intermediaries is a staggering 45 per cent, one of the highest in the manufacturing industry.
India currently is a net importer of all major petrochemicals except for benzene and polyester chips, he added.
"The Indian chemical sector continues to grow at a rate of 1.2-1.5 times the GDP and if you look at the Indian GDP growth, this is not insignificant. I would say it's a commendable growth," the minister said.
About 80 per cent of India's petrochemicals capacity is integrated with petroleum refineries, he said.
"This gives an edge in terms of petrochemical feedstock certainty, we are increasing our refining capacity from 215 million metric tonnes per annum in 2013-14 to 251.2 million metric tonnes per annum, the fourth largest in the world, after the United States, China and Russia.
"We have plans in place to take this from 252 million metric tonnes per annum to nearly 450 million metric tonnes per annum," Puri said.