Petrochemical Expansion
- The future of India’s chemicals and petrochemicals industry will be shaped by global demand shifts, sustainability imperatives and market evolution. Together, these forces are redefining the petrochemicals industry outlook globally while creating a distinct opportunity for India to emerge as a strategic growth hub, as per EY.1
- The chemical sector in India faces significant structural and macroeconomic risks, primarily due to China’s dominance in global commodity chemical capacities, according to a report by Nuvama.2
- BCG forecasts India’s chemical market will surge to over US$300 bn by 2030, more than doubling its current US$150bn valuation. This significant expansion is driven by robust domestic consumption and a major capital expenditure cycle.3
- Indian chemical companies should transform into global-scale institutions by pivoting from quantity-based metrics to solving chemistry problems for customers, says BCG report. The consultant urged chemical companies to integrate into capex super cycles early to capture returns in the 2030s.4
- India’s domestic petrochemical consumption growth is expected to remain robust at 6%-7%per annum in the medium term, supported by continued economic expansion and steady demand from downstream industries, according to CareEdge Ratings.5
Digitalization
- HPCL has successfully commissioned India’s first LC-MAX® residue conversion unit at its Visakh Refinery, supported by an integrated intelligence backbone, marking a significant milestone in the evolution of India’s downstream refining sector.6
- Experts are calling digitalization the decisive catalyst for India’s chemical future. From plant design to supply chains, a new wave of digital technologies is redefining productivity, safety and competitiveness across India’s chemical value chain.7
- Digitalisation plays a transformative role in enhancing CGD operations by integrating advanced technologies such as supervisory control and data acquisition (SCADA) systems, IoT sensors and smart meters for real-time monitoring, leak detection, efficient supply management and transparent billing.8
- MoPNG has accelerated India’s upstream transformation with a high-impact series of investor and technology-focused engagements in Mumbai on January 19, 2026, signaling that the country’s oil and gas exploration landscape is entering a new, reform-backed growth phase.9
Electric Vehicles (EVs) Penetration
- India’s EV market continued its rapid expansion in 2025, with total EV sales touching 2.3 million units and accounting for 8% of all new vehicle registrations. Electric two-wheelers remained the biggest driver of growth, with sales of 1.28 million units, making up 57% of total EV sales. Electric three-wheelers, including L3 and L5 categories, followed with 0.8 million units, or 35% of the market.10
- India has revised its policy for the electric vehicle sector as it enters a more mature phase of EV transition and focuses on efficiency and cost control. From 13 January, only those EVs that meet performance and efficiency requirements will qualify for incentives. The change marks a shift from volume-driven subsidies toward performance-based incentives.11
- Electric vehicle technology in India has improved significantly, but financing remains the biggest hurdle to mass adoption. Until loans become easier, affordable, and more innovative, EVs will stay aspirational rather than mainstream choices.12
- India’s Electric Passenger Vehicles market has expanded rapidly over the past five years. Yet adoption remains geographically concentrated. Southern states have consistently accounted for around one-third of national EV registrations. India’s EV transition, in effect, is being driven from the South.13
Sustainability
- Essar Future Energy, part of the Essar Global Fund, is planning to set up a large hydrotreated biofuels plant in India with a capacity of 800,000 tonnes per year. The project is expected to begin operations between the second half of 2028 and early 2029.14
- Indian Sugar and Bio-energy Manufacturers Association (ISMA) has urged Centre to undertake comprehensive GST rationalisation and provide targeted policy support across the biofuel and clean mobility ecosystem to cut emissions, protect farmer livelihoods, reduce crude oil imports and accelerate India’s journey towards net zero.15
- India continues to make steady gains in its ethanol programme, with rising production, higher blending levels and expanding manufacturing capacity reshaping the country’s energy mix. In the ongoing Ethanol Supply Year (ESY) 2025–26, ethanol blending in petrol touched 20% in December 2025.16
- India is poised to become a global supplier of Sustainable Aviation Fuel (SAF) by leveraging its surplus ethanol. Utilizing the Alcohol-to-Jet pathway, India aims to produce millions of liters of eco-friendly fuel, capitalizing on its feedstock availability and lower carbon intensity compared to rivals.17
Gas Market Growth
- India could save US$1bn in crude oil imports annually if the country switches 10% of its diesel usage in the transport sector to LNG, according to a case study done by PNGRB. Drawing a strong case for boosting LNG usage in heavy-haul transport, the regulator said India holds the scope to switch 30-40% of diesel vehicles to LNG in the next five-seven years.18
- The National Stock Exchange (NSE) is in discussions with the Indian Gas Exchange (IGX) to develop and launch Indian natural gas futures, an initiative aimed at strengthening the country’s natural gas market ecosystem.19
- A sharp surge in US gas and Asian LNG prices could weigh on near-term earnings for India’s major gas companies, according to a latest note by Citigroup. While the impact may be time-bound, Citi cautioned that higher input costs and volatility could pressure margins across gas transmission, trading and city gas distribution businesses.20
- India is now UAE’s largest customer of LNG, as per ADNOC Gas. The company noted in the release that 20% of LNG operated by ADNOC Gas will be supplied to India by 2029, revealing that US$20bn worth of LNG contracts were signed in last 24 months between ADNOC Gas and Indian companies.21
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