India has begun assessing the feasibility of locally manufacturing more than 200 petrochemical products that currently rely heavily on imports, as the government looks to reduce external dependence amid rising geopolitical and supply chain risks.
According to The Indian Express, the Department for Promotion of Industry and Internal Trade (DPIIT) has sought an "urgent response" from industry stakeholders on the possibility of domestic production of these products, whose combined annual import bill exceeds $50 billion.
The move comes amid growing concerns over potential supply disruptions and higher input costs linked to the escalating tensions in West Asia involving Iran, Israel and the US.
The government's localisation push is focused on reducing imports of key petrochemical raw materials used across sectors such as packaging, automobiles, construction, fertilisers, tyres, paints and consumer goods.
According to the report, the Centre has identified over 200 petrochemical products with high import dependence. These include widely used materials such as PVC, polyethylene, LDPE, polypropylene and polystyrene.
The list also includes engineering plastics, epoxy resins, nylon grades and acrylic fibres, along with chemicals such as phosphoric acid, ammonia, acetic acid and toluene, where the government wants to strengthen domestic manufacturing capacity.
Industry experts warned that prolonged instability in West Asia could eventually impact Indian manufacturing despite the availability of inventory buffers in the near term.
Any disruption in the supply of these petrochemical inputs could affect sectors ranging from FMCG and infrastructure to automotive manufacturing and e-commerce packaging.
Ajay Srivastava, former trade officer and founder of GTRI, 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," he said, adding that different products would require tailored policy support depending on technology intensity and domestic capability.
Chemical sector expert Ajay Joshi said India's localisation push faces a key challenge because most petrochemicals are themselves derived from imported crude oil and natural gas.
"The intent is strong, but the foundation remains borrowed," he told The Indian Express, while advocating for a "feedstock-first industrial policy" linked to coal gasification.
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