Economy

IAS Parliament 6 years

KEY POINTS

Challenges

Under-penetrated end-user markets
Limited access to competitive feedstock
Absence of a robust ecosystem with downstream players
Low focus on R&D
Regulatory and policy issues
Incentives such as import duty waivers on feedstock and cheap credit are lower in India than other Asian countries.
Investor-friendly processes such as single-window clearance, policy support for land acquisition and established industry bodies offering business advice and support are lacking.

Suggestions

Lessons from global successes – There are success factors that made hubs like Rotterdam, Singapore and Fujian world-class and these are the ones India should consider —

1. A robust ecosystem with anchor investors

2. High-quality logistics network

3. Investor-friendly policies

4. Regulations and incentives

5. High-quality infrastructure

6. Well-defined ownership structures

Increase domestic demand - Slow-scale adoption in many industry segments has stunted the sector’s growth.
In agriculture, plasticulture is low as is the use of engineering plastics in automotive.
Enhancing usage in such sectors requires awareness, co-creation with end-users and focused R&D to help industries understand the benefits from petrochemicals adoption.

Strengthening the ecosystem – Ways to help build such an ecosystem are
Infrastructure – It needs to expedite petrochemicals park implementation through creating world-class production facilities with scale and efficiency.
Drawing on global successful hubs, whilst recognising her unique end-market needs, India can tackle the challenge of growing the domestic sector.
More focus on R&D – India’s focused R&D efforts should develop production technologies like catalysts, additives and others that specifically enable domestic production and lower costs.
Role of Govt – The government has to play a leading role in driving India’s petrochemicals vision.
Addressing these concerns as a matter of priority will boost confidence in the sector and encourage foreign investors to value India’s petrochemicals future.