India’s rising petrochemical production capacity
India is now preparing to become the next big player in the petrochemical industry. According to the latest report of S&P global ratings, this step can further increase the supply imbalance already existing in Asia. India’s plan is like China’s strategy, which has already strengthened its hold in the global market. China is the world’s largest and India is the third largest chemical consumer. Both countries are now increasing the domestic production capacity of chemical products that are used in everyday things like plastic, packaging and auto parts.
Competition will increase in Asia
According to S&P’s credit analyst Ker Liang Chan, India’s petrochemical production capacity will speed up competition in the Asian market after China. The report shows that India will continue big investment so that the country can reduce dependence on imports. Currently, the Asia-Pacific region already has overcapacity, and India’s new production capacity can make it more complicated.
Investment and private sector role
India’s government undertakings are investing $ 25 billion, which is associated with refinery expansion schemes. At the same time, private sector investment is close to $ 12 billion, which can be a bit flexible. S&P has warned that this step can increase the challenge for Asian exporters. Now they will be required to divert their sales and optimize capital expenses. It will not be easy in other markets, such as America, as there are tariff barriers.
Domestic demand will remain strong
India’s domestic market is likely to remain strong. The country may soon surpass America and become the second largest consumer in the world of polyethylene. According to S&P analyst Shaun Park, the targets of becoming self -sufficient of India and China are further enhancing the overcapacea already existing in the industry, especially amidst slow global demand.