India Seeks to Cut Reliance on $50 Billion Petrochem Imports with Local Manufacturing Push

The Indian government has started engaging with industry players to assess the possibility of manufacturing a wide range of petrochemical products locally as geopolitical tensions and supply-chain risks increase concerns around import dependence. 

Government Identifies Products with High Import Dependence 

As per The Indian Express report, the Department for Promotion of Industry and Internal Trade (DPIIT) has asked industry stakeholders to urgently assess the possibility of manufacturing over 200 petrochemical products within India. 

These products currently contribute to annual imports exceeding $50 billion. 

The government’s push for localisation comes amid escalating geopolitical tensions involving Iran, Israel and the United States in West Asia, which have heightened concerns over potential supply chain disruptions and increasing input costs for Indian industries. 

The identified petrochemical products are extensively used across sectors such as automobiles, packaging, construction, fertilisers, tyres, paints, FMCG and e-commerce packaging. 

PVC, Engineering Plastics and Chemicals Under Focus 

Among the products identified are widely used materials such as PVC, polyethylene, LDPE, polypropylene, and polystyrene. 

The government is also evaluating domestic manufacturing capacity for engineering plastics, epoxy resins, nylon grades, and acrylic fibres. 

Chemicals including phosphoric acid, ammonia, acetic acid and toluene have additionally been identified as products where India wants to strengthen local production capability. 

Industry experts warned that prolonged instability in West Asia could eventually affect Indian manufacturing operations despite near-term inventory availability. 

Experts Say Multiple Policy Approaches Will Be Needed 

Ajay Srivastava, Founder of Global Trade Research Initiative (GTRI) and former trade officer, said India’s petrochemical import dependence remains structurally vulnerable. 

“The list of items suggests that India's import substitution strategy cannot rely on a single policy instrument, such as tariffs or PLI schemes,” Srivastava said. 

He added that different petrochemical products would require tailored policy support depending on domestic manufacturing capability and technology intensity. 

Read More: Commerce Minister Piyush Goyal to Visit Canada for High-Level Business and CEPA Negotiations! 

Conclusion 

India’s latest petrochemical localisation initiative reflects the government’s broader effort to strengthen manufacturing resilience and reduce exposure to global supply disruptions as import dependence in critical industrial inputs continues to remain high. 

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