India must urgently expand its petrochemical production capacity to meet rising domestic and international demand—and to check China’s accelerating dominance in the sector—according to a statement from Reliance Industries Limited (RIL).
China’s Surplus Weighs on Global Margins
Petrochemical profit margins have narrowed globally, largely due to China’s aggressive capacity expansion, which has led to a market surplus. In some Chinese refineries, petrochemicals account for as much as 40%–50% of total output—more than double the typical petrochemical share seen in Indian refineries. “China is taking over the entire petrochemical industry,” warned Vikram Sampat, Senior Vice-President, Strategy and Business Development (Polyester Chain), at Reliance Industries, during an industry conference on July 11. “If we don’t do it, China will continue to grow,” he cautioned.
Rising Indian Demand Amid Shifting Energy Trends
Although India’s petrochemical demand currently lags behind the global average, consumption is expected to grow significantly in tandem with the country’s economic expansion. India now boasts the fastest-growing economy among major nations, while China’s growth has slowed, with gasoline and gasoil demand reaching saturation, many analysts say. In contrast, India’s fuel consumption continues to rise, albeit at a more measured pace, as the country transitions toward cleaner energy alternatives.
Petrochemicals Critical for Future Refinery Viability
Currently, Reliance operates with a petrochemical intensity of 20%—the portion of petrochemicals within its overall refining output. Analysts believe that Indian refiners will increasingly shift toward petrochemical production in the coming years to maintain profitability and support long-term growth, especially as fossil fuel demand nears its peak.
Strategic Action Needed to Stay Competitive
As reported by hydrocarbonprocessing.com, Reliance’s call to action underscores the strategic importance of building a robust petrochemical industry in India—not just for economic resilience, but also to remain competitive in the global energy and manufacturing landscape.
