The growth of petrochemicals industry is crucial to any economy because it acts as a powerhouse to a number of industries. To foster growth, India needs to improve its infrastructure facilities, reduce cost of capital, strengthen labor laws, and end rigid bureaucracy.
Petrochemicals are crucial to the Indian economy since they cater to the needs of major industries like power, telecom, cables, plastic, textile etc. The Petrochemicals Industry is a capital--intensive and high volumes industry. Since it is technology--driven, technology obsolescence affects the industry. The industry is cyclical in nature; one boom or recessionary cycle takes around 5--7 years. To avoid the cyclical nature, most of the players usually set up fully integrated and global size capacity plants.
Petrochemicals can be broadly classified as polymers (plastics), synthetic fibers, synthetic rubbers, and synthetic detergents. Out of these, the plastics and synthetic fiber business together account for 85% of the total demand for petroproducts. Among these, the polymers products (HDPE, LLDPE, LDPE, and PP) are the most important ones, as they constitute 70% of petrochemicals consumed. Modern living is closely linked to petrochemicals as they are the key inputs for every other consumer durable. The industry's major output, namely plastics, finds application in diverse products like white goods, automobiles, computer hardware, packaging materials, toys, electrical equipment, medical equipment, etc.
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