Envisioning the future of India’s chemicals and petrochemicals industry

How industry trends, technology disruption and sustainability imperatives are reshaping growth, value chains and business models.

In brief

• The future of India’s chemicals and petrochemicals industry will be shaped by global demand shifts, sustainability imperatives and market evolution.
• Technology disruption, particularly AI and digitalization, is accelerating value chain transformation and creating new growth opportunities in R&D, manufacturing and supply chains.
• Strategic transformation and business model innovation are essential as industry trends drive consolidation, decarbonization and portfolio realignment.

The chemicals and petrochemicals sector is entering a defining decade. The future of the chemicals sector in 2026 and beyond will be shaped by a confluence of structural shifts—ranging from geopolitical realignments and energy transition to disruptive technologies and evolving consumer expectations. Together, these forces are redefining the petrochemicals industry outlook globally while creating a distinct opportunity for India to emerge as a strategic growth hub.

One of the most significant trends in the chemicals industry is the realignment of global demand and supply. Persistent overcapacity in key petrochemical chains such as ethylene, propylene and aromatics—largely driven by China-led capacity additions—has compressed margins and accelerated consolidation. Europe is witnessing asset rationalization and divestments, while the US and Middle East continue to leverage feedstock advantages. Against this backdrop, trends in the India chemical sector stand out, supported by strong domestic demand and planned large-scale investments, positioning the country as a key beneficiary of petrochemicals market evolution.

At the same time, value creation is increasingly shifting toward high-growth value pools. Advanced polymers, specialty and next-generation chemicals, sustainable and green chemicals, and energy transition-related products such as battery chemicals and low-carbon hydrogen are expected to outpace traditional segments. These ‘New Age’ chemical segments are poised to represent a market opportunity nearing US$1 trillion by 2030, underscoring their role as the most dynamic value pools within the global chemical sector. These growth opportunities reflect a broader value chain transformation, where companies are moving away from pure volume play toward differentiated, higher-margin offerings.

Technology disruption is another defining force reshaping the sector. Artificial intelligence and advanced analytics are no longer optional; they are becoming central to competitiveness. Across R&D, AI-driven material discovery and polymer design are significantly accelerating innovation cycles. In manufacturing and supply chains, predictive maintenance, process optimization and demand forecasting are delivering measurable EBITDA improvements. A leading global chemicals manufacturer is leveraging an advanced generative AI platform to accelerate the identification and verification of new application opportunities, leading to a two-fold increase in the number of new applications discovered. A leading global chemicals company is implementing digital twin technology across its manufacturing facilities in Norway and the Netherlands to enhance operational visibility and data-driven optimization. This digital shift also enables greater resilience, end-to-end visibility and customer-centric innovation, all of which are essential amid global demand shifts and geopolitical uncertainty.