Petrochemical Expansion
- Petrochemicals demand in India is estimated to be about US$300bn in 2025 and expected to rise to about US$390bn in 2030. The next target is to reach US$1tn by 2040 and specialty chemicals will play a key role in it.1
- Rajasthan has begun allocating land for the new Petro Zone (RPZ) in Pachpadra. The Petro Zone is being developed by Rajasthan State Industrial Development and Investment Corporation (RIICO). The RPZ has been established close to the upcoming HPCL Rajasthan Refinery. The new project is expected to attract companies focused on plastic and polymer processing.2
- L&T’s Hydrocarbon Onshore business vertical has won a major order from BPCL. The scope of work encompasses engineering, procurement, construction and commissioning of a Linear Low-Density Polyethylene / High-Density Polyethylene (LLDPE / HDPE) Swing Unit comprising two trains of 575 KTPA each, at Bina in Madhya Pradesh.3
Digitalization
- India’s hydrocarbon potential remains largely untapped. This is where digitalzsation and advanced analytics come into play–reshaping exploration workflows, improving accuracy, reducing cycle times, and strengthening cost efficiency.4
- India’s EPC/EPCM sector is undergoing a structural shift driven by digitalization, sustainability and global competitiveness. With AI-led engineering, digital twins and rising demand for low-carbon infrastructure, EPC/EPCM firms are evolving from project contractors into technology-driven partners.5
Electric Vehicles (EVs) Penetration
- India’s electric passenger vehicle market grew 61 y-o-y in November with 14,739 units registered, making it the fifth-best month of 2025. Tata Motors continues to lead with a 42% EV market share.6
- India’s electric vehicle market has touched a new milestone this year, with total EV registrations (excluding hybrids) crossing 2.02 million units, already surpassing the full-year 2024 figure of 1.95 million units, on the back of rising consumer demand, wider model availability and certain level of policy support.7
- India’s electric car market continues to rely heavily on Chinese imports, with the vast majority of models failing to meet the domestic value-addition thresholds mandated under the government’s PLI scheme. Only six out of 46 EV models sold in the country have been found eligible for incentives.8
- VinFast and the Government of Tamil Nadu has signed a MoU to allocate 200 hectares of land in the SIPCOT Industrial Park in Thoothukudi, providing an opportunity for VinFast to broaden its product portfolio from electric cars to electric buses, e-scooters and charging infrastructure.9
- As per Tata Motor CEO, the tipping point for EV market will be around 2030, when entry-level EVs will cost the same as gasoline cars while offering about 400 km of range. Currently, the most affordable EVs cost 25–30% more than gasoline cars and provide less than 300 km per charge.10
Gas Market Growth
- Consumers across India are set to benefit from reduced prices of CNG and domestic Piped Natural Gas (PNG) as the Petroleum and Natural Gas Regulatory Board (PNGRB) announced a tariff rationalisation that will come into effect from January 1, 2026. The new unified tariff structure will result in savings of INR 2-3 per unit for consumers, depending on the state and applicable taxes.11
- A high-level expert committee set up by the PNGRB has called for sweeping structural reforms to create a free, competitive natural gas market in India, arguing that market-driven pricing and open access are essential for the country’s clean energy transition.12
- The government has notified the new Petroleum and Natural Gas Rules, 2025, replacing the earlier system of multiple licences with a single petroleum lease covering exploration, development and production of all hydrocarbons, including shale.13
- The PNGRB’s “Vision 2040” report calls for proactive gas infrastructure development, but analysts say LNG will have to compete with cheaper domestic coal, expanding solar capacity, batteries and pipeline gas.14
- JERA has signed its first long-term LNG SPA to supply LNG outside Japan, with India’s Torrent Power. JERA will supply four LNG cargoes per year, on a Delivered Ex-Ship basis for a period of 10 years, commencing in 2027.15
Sustainability
- In October 2025, ethanol blending in gasoline in India reached 20%, with cumulative blending for the period from November 2024 to October 2025 at 19.2%. For Ethanol Supply Year 2025–26 (Cycle 1), OMCs have allocated approximately 10.48 bn litres of ethanol against 17.76 bn litres of offers received from manufacturers across the country.16
- The Indian government has set a 5% blending target for sustainable aviation fuel (SAF) by 2030 on international flights departing from India. As a member of the International Civil Aviation Organization (ICAO), India is obligated to comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).17
- Around 11.2 mtpa of green hydrogen capacity has been announced in India. However, only 0.1% (9,770 tonnes per annum) is under construction, and 2.8% was operational as of August 2025, reflecting the industry’s relatively early stage of development. The industry is facing headwinds due to high production costs and demand uncertainty.18
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