The Indian petrochemicals industry is expected to grow at 12-15% annually over the next five years, according to a report from the Associated Chambers of Commerce and Industry of India (Assocham).
The 'Mark Up for Growth: PCPIR in Andhra Pradesh' study said that the $40bn industry would attract foreign investment as the world petrochemical industry moves eastwards, with major hubs being established in Asia and the Middle East.
The study said the global petrochemical industry, which posted sales of $2.5tn in 2010, is moving eastwards, offering opportunity for India to attract funds in the industry.
"This (movement) simultaneously represents a tremendous window of opportunity for Indian chemical and petrochemical industries," Assocham told The Press Trust of India.
The study suggested that the Indian chemical industry needs to maintain certain competitiveness and cost-effectiveness levels to overcome competition, which could emerge from hubs in China, Singapore and the Middle East to attract the foreign funds.
The Indian Government has since notified four petroleum, chemical and petrochemical investment regions (PCPIRs) - Haldia in West Bengal, Dahej in Gujarat, Vishakhapatnam in Andhra Pradesh, and Paradeep in Orissa.
The government is also planning to establish PCPIRs in the states of Tamil Nadu and Karnataka.
According to a recent report by global consultancy firm McKinsey, around $350bn of the projected $1tn world specialty chemical industry could move to Asia due to manufacturing costs and downstream demand.
Established in 1920, Assocham is one of the apex trade associations of India, which aims to encourage both domestic and international trade, and reduce trade barriers.
