India's Petrochemical Exports Face Global Competition Amidst Chinese Expansion

New Delhi, Feb 8 (KNN) As India gears up to enhance its oil refining and petrochemicals capacity, the country's petrochemical exports are poised to encounter stiff competition globally, fuelled by China's burgeoning manufacturing capabilities.

Toril Bosoni, head of the oil industry and markets division at the International Energy Agency (IEA), highlighted the challenges during an interview with mint.

Bosoni underscored the intense pressure gripping the global petrochemical industry, accentuated by China's shift towards bolstering domestic production.

Traditionally a significant importer, China's expansion is reshaping global dynamics by opting to import feedstock rather than finished petrochemical products, thereby straining producers worldwide.

The IEA official emphasised India's robust domestic demand for petrochemical products, propelled by the nation's economic and manufacturing growth.

However, she cautioned about continued competition and margin pressures on a global scale.

India's ambitious plans to ramp up refining capacity to 450 million tonnes per annum by 2030 align with its vision to emerge as a key hub for petroleum and petrochemical products.

Nevertheless, the IEA's recent report suggests that India's petrochemical sector growth is anticipated to lag behind the global average during 2023-2030.

According to the IEA report titled 'India Oil Market Outlook to 2023' released on Wednesday, the petrochemical sector is projected to drive significant oil demand growth globally, with India expected to witness substantial growth.

By 2027, India is set to surpass China in oil demand growth, accounting for more than one-third of the global demand increase.

The report forecasts India to be the largest source of global oil demand growth from 2023 to 2030.

Despite this, India's additional demand will be spread diversely across product categories compared to other major economies, with only 18 per cent earmarked for petrochemical feedstock use, contrasting with over 90 per cent globally and nearly all gains in China.

While domestic demand remains robust, global competition and margin pressures persist, necessitating strategic measures to sustain growth amidst evolving market dynamics.

(KNN Bureau)