Forecast Period | 2026-2030 |
Market Size (2024) | USD 3.06 Billion |
CAGR (2025-2030) | 4.92% |
Fastest Growing Segment | Hydrogen |
Largest Market | West India |
Market Size (2030) | USD 4.04 Billion |
Market Overview
India Industrial Gases Market was valued
at USD 3.06 Billion in 2024 and is expected to reach USD 4.04 Billion by 2030
with a CAGR of 4.92% during the forecast period. Industrial gases, including
oxygen, carbon dioxide, argon, nitrogen, and hydrogen, play a critical role in
various industrial processes and applications. These gases are vital across
multiple sectors such as manufacturing (including automotive, steel, and
cement), healthcare, chemical processing, and energy production. They are
typically delivered in large volumes and come in various forms, such as
compressed gases, liquids, and solids.
Companies are increasingly investing in
research and development to create new gas mixtures, enhance efficiency, and
develop sustainable solutions. The rising influx of foreign direct investment
(FDI) and domestic investments in manufacturing and infrastructure is driving
the demand for industrial gases. Government initiatives like the Make in India
program are supporting industrial growth across sectors that depend on these
gases.
There is a growing emphasis on green and
sustainable technologies, including carbon capture and storage (CCS) and green hydrogen
fuel. This focus is fueling innovation in gas production and application. Companies
are also seeking ways to recycle gases and manage waste effectively to reduce
environmental impact. Advances such as pressure swing adsorption (PSA), and
cryogenic distillation are enhancing the efficiency and cost-effectiveness of
gas production.
Customization of gas mixtures for
specific industrial processes, such as specialized welding gases or high-purity
gases for electronics, is increasingly in demand. Additionally, heightened
awareness and regulatory requirements concerning safety and environmental
impact are influencing market practices. Robust infrastructure for
transportation and distribution is essential for market growth. Fluctuations in
raw material prices can affect profitability. The integration of digital
technologies in gas monitoring, control systems, and remote management is
improving operational efficiency and safety, with smart sensors and IoT playing
a key role.
The Indian industrial gases market is
set for expansion, driven by industrial growth, technological advancements, and
changing consumer needs. Strategic investments in infrastructure and technology
will be crucial for companies to leverage emerging opportunities in this
growing market.
Key Market Drivers
Growth of Healthcare sector
As
disposable incomes and healthcare expenditures increase, investments in
healthcare infrastructure, equipment, and technologies which rely on industrial
gases are also rising. Enhanced health insurance coverage and financing options
are allowing more individuals to access advanced medical treatments and
facilities, thereby boosting the demand for medical gases. According to the
Economic Survey 2022-23, India’s public healthcare spending reached 2.1% of GDP
in FY23 and 2.2% in FY22, up from 1.6% in FY21.
Government
initiatives such as Ayushman Bharat and other programs aimed at enhancing
healthcare access and quality often require substantial investments in medical
gases and related infrastructure. The COVID-19 pandemic underscored the
essential role of medical gases in patient care, prompting increased
investments in healthcare infrastructure and gas supply systems. Additionally, the
Indian government plans to introduce a USD 6.8 billion credit incentive program
to further strengthen the country’s healthcare infrastructure.
The
growth in new hospitals, clinics, and diagnostic centers across both urban and
rural areas is driving the need for medical gases. Oxygen, crucial for
respiratory care, is used extensively in hospitals for emergency situations,
surgeries, and treating chronic respiratory conditions. Medical air and
nitrogen are employed in various healthcare applications, including powering
medical equipment and preserving medical supplies, while carbon dioxide is used
in procedures like laparoscopic surgeries to facilitate better visualization.
The emphasis on improving patient outcomes and care quality is increasing the
demand for advanced medical gases and systems.
As
healthcare facilities continue to expand and modernize, the need for
high-quality, reliable medical gases and delivery systems will grow,
positioning the healthcare sector as a key driver of growth in the industrial
gases market.
Rising Focus on clean energy
The
emphasis on clean energy is profoundly affecting the industrial gases market in
India, driving increased demand for gases used in hydrogen production, carbon
capture, renewable energy technologies, and sustainable industrial practices.
Government policies and incentives designed to promote clean energy and reduce
carbon emissions are fostering growth in the industrial gases sector. Carbon
capture and storage technologies, aimed at lowering greenhouse gas emissions
from industrial activities, are increasing the need for gases involved in
capturing, transporting, and storing carbon dioxide.
India
is set to introduce a carbon capture policy later in 2024, which will encourage
companies to capture, recycle, and store their emissions underground, while
still utilizing the country's extensive coal resources. Additionally, there is
a rising focus on hydrogen as a clean energy source for fuel cells and energy
storage, boosting demand for hydrogen production technologies and related
industrial gases. In January 2024, the Union Ministry of New and Renewable
Energy (MNRE) issued guidelines and incentives under the National Green
Hydrogen Mission to promote the acquisition of green hydrogen. The USD 2.09
billion allocated for the Strategic Interventions for Green Hydrogen Transition
(SIGHT) program aims to enhance domestic electrolyser manufacturing and green
hydrogen production, with incentives designed to reduce costs and accelerate
growth. Financial incentives, such as subsidies and grants, support the
development of clean energy technologies that rely on industrial gases.
Innovations
in energy storage, including advanced batteries and supercapacitors, often
require specialized gases like nitrogen for their production and use. In
2023, INOX Air Products secured a 20-year contract with First Solar, a
prominent American solar technology firm and global leader in photovoltaic (PV)
solar energy solutions. This partnership involves overseeing the design,
engineering, installation, and operation of a Cryogenic Nitrogen Generator,
which will provide high-purity nitrogen for First Solar’s new manufacturing
facility in Pillaipakkam, Tamil Nadu. As clean energy initiatives expand
into both urban and rural areas, the demand for industrial gases in these
emerging markets is growing, including in remote or underserved regions. As
India continues to prioritize clean energy, the industrial gases market is set
to expand, presenting new opportunities for innovation and development.
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Key Market Challenges
Price Volatility
Price
volatility poses a significant challenge in the Indian industrial gases market,
affecting cost management, pricing strategies, and overall profitability. The
prices of raw materials used in gas production, such as natural gas, air, and
other chemicals, can fluctuate unpredictably. For instance, in July 2024, the
government raised the price of natural gas to USD 8.51 per metric million
British thermal unit (mmBtu) for August, up from USD 8.24 in July. This
volatility can make it difficult for companies to pass increased production
costs onto customers due to competitive pressures, potentially eroding profit
margins.
Intense
market competition compels companies to carefully manage pricing. Frequent
adjustments in response to changing raw material costs can complicate pricing
strategies and strain customer relationships. Additionally, price volatility
introduces uncertainty into capital investment decisions. Companies may delay
or reconsider investments in new technologies or infrastructure due to concerns
about future price stability, which can affect projected returns on investment
(ROI).
Price
fluctuations can impact on contract negotiations with customers and suppliers,
making long-term contracts or fixed-price agreements more complex. To address
these challenges, companies must implement effective cost control measures to
mitigate the effects of price swings and maintain financial stability.
Infrastructure Constraints
Infrastructure
constraints pose a major challenge in the Indian industrial gases market,
affecting production, distribution, and overall efficiency. Insufficient
transportation networks and logistics infrastructure can impede the smooth
movement of industrial gases from production sites to end-users. Issues such as
poor road conditions, limited rail connectivity, and disruptions in the supply
chain including traffic congestion and inadequate warehousing can delay gas
delivery, impacting both customer satisfaction and operational efficiency. There
is also a lack of advanced storage facilities for industrial gases,
particularly in remote or underserved areas. This shortfall can affect the
availability and reliability of gas supplies. Proper storage solutions are
essential for safe gas handling, and inadequate infrastructure can introduce
safety risks and lead to regulatory compliance issues and higher operational
costs.
Outdated
or inefficient production technologies can decrease overall efficiency and
increase production costs. Upgrading to modern technologies necessitates
significant capital investment. Additionally, uneven infrastructure development
across different regions can lead to inconsistent service levels and potential
market imbalances. Navigating the regulatory approvals and securing necessary
permits for infrastructure projects can be both time-consuming and complex,
further complicating the development of new facilities. Overcoming these
challenges requires strategic investments, improved planning, and cooperation
between industry stakeholders and government bodies. Enhancing infrastructure
is vital for supporting market growth, increasing efficiency, and meeting the
rising demand for industrial gases.
Key Market Trends
Shift Towards Circular Economy
Companies
are advancing technologies to recycle industrial gases, such as carbon dioxide,
which can be captured, purified, and repurposed in various processes. This
approach minimizes waste and optimizes resource utilization. For instance, in
2024, Oil India, with government backing, launched a carbon capture and storage
project. This initiative focuses on capturing CO₂ emissions from Oil India’s natural gas
field in Rajasthan and securely storing them in nearby dry wells, supporting
the company’s objective of achieving net-zero emissions by 2040.
The
implementation of closed-loop systems for gas handling is another strategy to
reduce emissions and waste by recapturing and reusing gases within the
production cycle. Emphasizing sustainable practices to minimize by-products and
waste associated with gas production and processing is becoming increasingly
important for reducing environmental impact and improving efficiency.
Investment
in green technologies and innovations supporting circular economy principles is
on the rise. This includes the development of low-impact gases and technologies
that enhance environmental sustainability. For example, in 2023, the
clean-tech company GR2L in Surrey, England, secured a USD4.9 million order to
provide its argon recycling technology, ArgonØ, to Mundra Solar for a 2 GW
solar facility in India. This technology can recycle up to 95% of argon used in
silicon wafer fabrication for solar panels.
Companies
are investing in technologies and practices aimed at controlling and reducing
emissions from industrial processes. This includes advanced filtration and
scrubbing systems for effective emission management. Researchers at the
Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR) are
investigating the use of CO₂
in syngas (synthetic gas) technology, which contributes to a more sustainable
and circular economy. In 2024, Tata Steel partnered with JNCASR to develop CO₂ conversion technology at a laboratory
scale, with Professor Sebastian C. Peter leading the project and Tata Steel
funding the research.
The
shift towards a circular economy fosters practices that reduce the carbon
footprint of industrial gas operations, aligning with both global and national
sustainability goals. Adopting this trend is essential for enhancing resource
efficiency, minimizing environmental impact, and maintaining a competitive edge
in the evolving industrial gases market.
Segmental Insights
Product Type Insights
Based
on Product Type, the Hydrogen emerged as the fastest
growing segment in the Indian market for Industrial Gases during the forecast
period. India
is placing increasing emphasis on hydrogen as a key clean energy source. The
government's initiatives, particularly the National Green Hydrogen Mission
launched on January 4, 2023, with a funding allocation of USD 2.36 billion
through FY 2029-30, are designed to make hydrogen a central element of the
country's clean energy strategy. Significant investments are being directed
towards the production of green hydrogen, generated from renewable energy
sources, aligning with global trends toward sustainable energy solutions. To
support this, the Indian government is rolling out policies and incentives to
boost hydrogen production and usage. This includes financial backing for
research, development, and scaling up hydrogen technologies. In July 2024,
the Ministry of New and Renewable Energy (MNRE) introduced guidelines for the
second phase of the Strategic Interventions for Green Hydrogen Transition
(SIGHT) Programme Component II, which focuses on incentivizing green hydrogen
production. This program aims to expand India's green hydrogen production
capacity to 450,000 tonnes per annum (TPA), with 40,000 TPA designated for
biomass-based pathways (bucket-II) and the remainder for technology-agnostic
pathways (bucket-I).
Hydrogen
is increasingly utilized in fuel cells for automotive, power generation, and
other sectors. The expansion of the electric vehicle market, especially
hydrogen fuel cell vehicles, is driving demand. In April 2024, Ohmium
International announced a strategic partnership with Tata Projects, a prominent
sustainable technology EPC company in India. This collaboration seeks to
advance green hydrogen projects in India by combining innovative technology with
engineering expertise. Ohmium will supply PEM electrolyzers, while Tata
Projects will oversee the entire EPC process, including engineering, design,
integration, and optimization. Technological advancements in hydrogen
production, such as electrolysis and steam methane reforming with carbon
capture, are enhancing the viability and cost-effectiveness of hydrogen.
Additionally, in July 2024, India and Austria announced a sustainable economic
partnership, supporting collaboration between institutions in renewable energy
and green hydrogen. As infrastructure develops and costs fall, the hydrogen
sector is expanding rapidly, driven by growing adoption across various
industries.
Mode of Distribution Insights
Based
on Mode of Distribution, Bulk & Cylinder emerged as the dominating segment
in the Indian market for Industrial Gases in 2024. Industries like steel,
cement, chemicals, and petrochemicals require substantial amounts of gases such
as oxygen, nitrogen, and hydrogen, which are efficiently delivered through bulk
distribution. This mode of distribution provides cost benefits for high-volume
needs, while cylinders offer a versatile solution for varied and smaller-scale
applications. The integration of bulk and cylinder distribution ensures a
well-balanced supply chain that addresses different demand levels and
operational requirements. As industrial activities grow, the demand for both
bulk and cylinder gases rises, serving a range of applications from large
industrial operations to smaller workshops and facilities. Key sectors like
manufacturing, healthcare, and food processing depend on both distribution
methods for their gas supply needs. For example, Confidence Petroleum has
invested Rs 350 crore in its Nagpur plant, with plans to initially produce
100,000 type 4 cylinders, increasing to 300,000 units in the coming years.
These cylinders are 30%
lighter than traditional steel ones, enabling them to store more fuel such as
green hydrogen and cover greater distances on a single fill. They are also more
robust, designed to endure higher pressures and temperatures. This expansion reflects the growing
need for both bulk and cylinder gases across various industrial applications.
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Regional Insights
Based
on Region, West India emerged as the dominant region in the Indian market for Industrial
Gases in 2024. States like Gujarat and Maharashtra in Western India are major
industrial centers, hosting a significant number of industries including
petrochemicals, steel, automotive, and pharmaceuticals, all of which have
substantial needs for industrial gases. In 2023, INOX Air Products announced
plans to construct its sixth Air Separation Unit (ASU) at the Hazira plant of
AM/NS India in Gujarat. This new ASU will have a daily production capacity of
1,000 tons of oxygen and nitrogen. Once completed, it will elevate the total
capacity of the industrial gas complex to 11,100 tons per day.
Western
India boasts a well-developed infrastructure for the production, storage, and
distribution of industrial gases. Major ports such as Mumbai and Kandla play a
crucial role in facilitating the import and export of these gases. The region’s
advanced logistics network supports the efficient and timely distribution of
industrial gases across various industries. Many leading industrial gas
companies have invested heavily in Western India, establishing large production
facilities and extensive distribution networks to cater to the high demand. In
June 2024, Essar Group announced plans to invest USD 3.58 billion over the next
four years to set up a green hydrogen plant in Jamnagar, Gujarat.
Additionally, in 2024, NTPC Green Energy Limited (NGEL), a wholly owned
subsidiary of NTPC, formalized a Memorandum of Understanding with the
Government of Maharashtra. This agreement outlines collaborative efforts to
develop Green Hydrogen and its derivatives, with a target capacity of up to 1
million tons per annum.
The
Western region’s diverse industrial base, which includes sectors such as
chemicals, textiles, and food processing, continuously drives demand for
various types of industrial gases. The combination of significant industrial
activities, advanced infrastructure, and substantial investments underscores
the Western region’s dominance in the Indian industrial gases market.
Recent Development
- In
July 2024, Air Liquide India announced the establishment of a USD 41.80 Million
manufacturing unit in Mathura, Uttar Pradesh. This air separation unit, focused
on healthcare and industrial merchant activities, has a daily production
capacity of over 300 tonnes of liquid and medical oxygen, 45 tonnes of liquid
nitrogen, and 12 tonnes of liquid argon. It will serve the Delhi Capital
Territory, Western Uttar Pradesh, Rajasthan, and Madhya Pradesh. The facility
is also set to operate entirely on renewable energy by 2030.
- In
June 2024, Air Products, in partnership with INOX Group, will launch India’s
inaugural green hydrogen plant for glassmaking in July. INOX Air Products has
secured a 20-year offtake agreement with Asahi's Indian subsidiary to provide
hydrogen for a new float glass production facility in Rajasthan.
- In
April 2024, INOX India Ltd received a patent from the Patents Office,
Government of India, for its innovative method of suspending inner vessels
within Dewar-type containers used for storing cryogenic fluids, such as liquid
nitrogen, oxygen, and argon. Dewar containers, which are insulated and often
double-walled with vacuum insulation, are designed for cryogen storage, like
thermos flasks.
- In
January 2024, Linde expanded its long-term supply agreement with Steel
Authority of India Limited (SAIL). Linde will invest approximately USD 60
million to build and operate an additional 1,000 tons per day air separation
unit (ASU) at SAIL’s Rourkela plant. This new ASU, expected to be operational
by 2026, will nearly double Linde’s on-site production and support SAIL’s
expansion. The facility will also serve both existing and new local merchant
customers. Linde currently supplies oxygen, nitrogen and argon to SAIL’s
Rourkela steel plant in Odisha, eastern India, from two on-site air separation
units (ASUs).
Key Market Players
- Linde
plc
- Praxair
Technology, Inc.
- Taiyo
Nippon Sanso India Pvt Ltd.
- INOX
Air Products Private Limited
- Bhuruka
Gases Limited
- Bombay
Oxygen Investments Ltd.
- Ellenbarrie
industrial Gases Ltd.
- Air
Liquide India
- Goyal
MG gases pvt.ltd
- SICGIL
India Limited
|
By
Product Type
|
By
Mode of Distribution
|
By Region
|
- Oxygen
- Nitrogen
- Hydrogen
- Carbon Dioxide
- Argon
- Helium
|
- Bulk &
Cylinder
- Tonnage/Gaseous
- Packaged
|
- West India
- North India
- South India
- East India
|
Report Scope:
In this report, the India Industrial Gases Market
has been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- India Industrial Gases Market, By Product Type:
o Oxygen
o Nitrogen
o Hydrogen
o Carbon Dioxide
o Argon
o Helium
- India Industrial Gases Market, By Mode of Distribution:
o Bulk & Cylinder
o Tonnage/Gaseous
o Packaged
- India Industrial Gases Market, By Region:
o West India
o North India
o South India
o East India
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents in the India Industrial
Gases Market.
Available Customizations:
India Industrial Gases Market report with the given
market data, Tech Sci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
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