Forecast Period | 2026-2030 |
Market Size, By Volume (2024) | 201.22 Million Tonnes |
CAGR (2025-2030) | 3.54% |
Fastest Growing Segment | Electrical and Electronics |
Largest Market | West India |
Market Size, By Volume (2030) | 245.08 Million Tonnes |
Market Overview
India Phthalic Anhydride Market achieved a total market volume of 201.22 Million
Tonnes in 2024 and is expected to reach 245.08 Million Tonnes by 2030
with a CAGR of 3.54% during the forecast period. Phthalic anhydride, with the chemical
formula C8H4O3, is a white, crystalline solid used primarily as an intermediate
in the production of various chemicals and materials. It is typically produced
through the oxidation of ortho-xylene or naphthalene, using a catalyst such as
vanadium pentoxide.
One of its key applications is in the
creation of phthalate esters, which serve as plasticizers in flexible plastics
like polyvinyl chloride (PVC). The demand for these plasticizers is driven by
sectors such as construction, automotive, and consumer goods. Additionally,
phthalic anhydride is used in the production of dyes, pigments, and unsaturated
polyester resins, which are essential for reinforced plastics and coatings. The
growth of the construction and automotive industries further fuels the demand
for these resins.
Phthalic anhydride reacts with alcohols
to produce phthalate esters and can also be hydrolyzed to yield phthalic acid.
It is also used in manufacturing certain pharmaceuticals and agricultural
chemicals. The primary raw materials for its production, o-xylene and
naphthalene are obtained both domestically and through imports, and their price
and availability impact the cost and supply of phthalic anhydride.
Increasing
scrutiny and regulation of phthalates, due to health and environmental
concerns, are prompting manufacturers to seek alternative plasticizers and
adopt more sustainable practices. There is an increasing emphasis on creating
production processes that are more sustainable and environmentally responsible.
The Indian market, driven by industrial development and infrastructure
projects, is expected to continue its growth, adapting to changes in the
industrial and regulatory landscape.
Key Market Drivers
Construction and Real Estate
Development
The
Indian government’s emphasis on enhancing infrastructure, including roads,
bridges, and urban development, is driving increased demand for construction
materials. Phthalic anhydride plays a critical role in producing unsaturated
polyester resins and other essential construction materials. In the Interim
Budget 2024-25, the capital investment allocation for infrastructure has been
raised by USD 133.86 billion, representing 3.4% of GDP. Similarly, the Interim
Budget 2023-24 has allocated USD 30.72 billion for the Railways, marking a 5.8%
increase from the previous year.
Rapid
urbanization in India further fuels the demand for residential and commercial
buildings, leading to greater use of materials containing phthalate esters as
plasticizers. Foreign Direct Investment (FDI) in construction development
(including townships, housing, and infrastructure projects) reached USD 26.54
billion, while investment in infrastructure activities stood at USD 33.52
billion between April 2000 and December 2023. Increased investments from both
domestic and international sources are accelerating construction activities,
which in turn boosts the demand for phthalic anhydride and its derivatives.
According
to IBEF, foreign investors contribute approximately USD 4 billion annually to
Indian real estate, with a 20% year-over-year increase in foreign inflows in
2023. Additionally, the
Reserve Bank of India (RBI) reports that Real Estate Investment Trusts (REITs)
and Infrastructure Investment Trusts (InvITs) have accumulated USD 15.60
billion over the past four years up to March 2024.
Initiatives
to develop smart cities across India necessitate advanced building materials
and sustainable solutions, with phthalic anhydride-based products being
essential for high-performance composites and coatings. Its role in producing
coatings, sealants, and adhesives for construction further drives its demand.
Supportive government policies and incentives aimed at boosting the
construction sector, such as tax breaks and improved business conditions, also
positively impact the phthalic anhydride market. The ongoing renovation and
repair of existing structures sustains a steady demand for construction
materials incorporating phthalic anhydride, ensuring continued market growth.
Growing Consumer Goods Market
The
growth of the consumer goods market is driving increased demand for flexible
plastics used in packaging, electronics, and home products. Phthalic anhydride
is essential for producing phthalate esters, which act as plasticizers to
improve the flexibility and durability of these plastics. With the rise in
production of electronic devices and gadgets, there is a heightened need for
high-performance materials, including plasticizers for cables, connectors, and
other components, which boosts demand in this sector.
In
2022, the urban market segment contributed 65% to overall FMCG sales, while
rural India accounted for over 35%. Improved harvests and government spending
are expected to support a recovery in rural demand for FY24. The FMCG sector
grew by 8.5% in revenue and 2.5% in volume in the previous fiscal year. As companies seek innovative and
high-quality packaging solutions, the demand for phthalate-based plasticizers
increases. Phthalic anhydride is vital in producing these plasticizers,
enhancing the performance and visual appeal of packaging materials.
The
Indian government has permitted 100% FDI in food processing and single-brand
retail, and 51% in multi-brand retail, further stimulating the sector. Growing consumer demand for household
goods such as appliances and furniture heighten the need for durable, flexible
materials, with phthalic anhydride-based products being used in various
components, from appliance casings to upholstery.
Rising
disposable incomes are leading to increased consumer spending on a wide array
of goods, further driving the demand for products made with phthalic anhydride.
The focus on developing innovative, high-quality consumer products requires
advanced materials, making phthalic anhydride-derived resins and plasticizers
crucial for new product formulations and applications, thus supporting market
growth.
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Key Market Challenges
Regulatory Scrutiny and
Environmental Concerns
Governments
worldwide are implementing increasingly stringent regulations on phthalates due
to their potential health risks. This includes imposing restrictions on
phthalate esters used in consumer goods, such as toys and packaging. Adhering
to these regulations can raise operational costs and require significant
modifications to production processes. Additionally, this product is subject
to the mandatory BIS-ISI Mark certification scheme (Scheme-I of Schedule II),
which requires manufacturers and importers to secure a valid license by a
specified deadline. Non-compliance will result in a ban on importing, manufacturing,
or selling these goods in the Indian market.
Failure
to meet environmental and safety regulations can lead to legal consequences,
including fines, lawsuits, and reputational damage. Companies must stay current
with regulatory requirements to mitigate these risks. Meeting regulatory
standards necessitates substantial investment in testing, documentation, and
certification, increasing overall compliance costs and potentially straining
resources, particularly for smaller manufacturers.
The
demand for safer alternatives is driving the need to reformulate existing
products. This process is complex and costly, requiring significant research
and development to find viable substitutes for phthalate-based plasticizers and
resins that meet both performance and regulatory standards. Consumer preference
for environmentally friendly and non-toxic products is shaping regulatory
trends. To remain competitive, companies must adapt to these preferences. Companies
operating internationally face the challenge of navigating various regulatory
environments, adding complexity and time to their global operations.
Price Volatility of Raw
Materials
The
prices of essential raw materials like ortho-xylene and naphthalene can vary
widely due to market dynamics, geopolitical events, and disruptions in the
supply chain. These price fluctuations can affect the cost of producing
phthalic anhydride and subsequently impact profit margins. Disruptions such as
transportation issues, natural disasters, or political instability can lead to
shortages or delays, exacerbating cost challenges and production
inefficiencies.
Unpredictable
raw material costs create budget uncertainty for businesses, complicating
financial forecasting and resource planning. This volatility can also affect
manufacturers' ability to maintain stable product pricing, potentially
undermining their competitiveness and profitability.
Companies
may face difficulties negotiating with suppliers due to fluctuating raw
material prices, which can impact their bargaining power. To manage these
risks, businesses might need to invest in hedging strategies or secure
long-term contracts with suppliers. While these approaches can help stabilize
costs, they require additional resources and strategic planning. Consistent raw
material price volatility can erode profit margins, especially if companies are
unable to transfer increased costs to customers. This situation can strain
financial performance and overall profitability.
Key Market Trends
Expanding Automotive Sector
The
growth of the automotive sector is boosting the demand for high-performance
materials, such as phthalic anhydride-based resins and plasticizers. These
materials are essential for various automotive components, including interior
trims, dashboards, and under-the-hood parts, due to their durability and
flexibility. As automotive technology advances, the need for more sophisticated
materials increases. Phthalic anhydride-derived products are increasingly used
in advanced composites and coatings, which are crucial for new vehicle designs
and performance improvements.
The
surge in vehicle production, including passenger cars and commercial vehicles,
is driving the need for materials that incorporate phthalic anhydride. As
manufacturing scales up, so does the demand for components and materials that
can endure demanding conditions. According to IBEF, in January 2024, the
total production of passenger vehicles, three-wheelers, two-wheelers, and
quadricycles reached 2,328,329 units.
Collaboration
between automotive manufacturers and material suppliers is fostering
innovation, leading to the development of new phthalic anhydride-based products
tailored to the evolving needs of the industry. For instance, in February
2024, Vikas Ecotech Ltd. acquired a 100% stake in Vikas Organics Pvt Ltd. for USD
3.22 Million, expanding its product range to include various phthalate esters
and plans to produce Dioctyl Terephthalate (DOT) and other materials within
6-12 months. Dioctyl Terephthalate is used in manufacturing high-temperature
cables, automotive plastic parts, and leatherette.
The
automotive industry is also increasingly focusing on sustainability, driving
the shift towards more environmentally friendly materials. This includes
seeking alternatives to traditional phthalate-based products and using
renewable or recycled materials. For example, in 2023, the CSIR-Indian
Institute of Chemical Technology (IICT) developed a process to convert PET
bottles into safer phthalate-free Dioctyl Terephthalate (DOTP), and this
technology was transferred to Chandantara Dugar Group (CDG) Petchem Ltd. for a
new plant in Hyderabad.
Additionally,
in 2023, Sohar Freezone announced a strategic partnership with Nasim Chemicals
to establish a USD 10.4 million chemical manufacturing plant. This facility
will produce Dioctyl Phthalate and Dioctyl Terephthalate, catering to the
growing demand in the GCC, India, and African markets. The expanding automotive
aftermarket is also contributing to the increased demand for phthalic
anhydride-derived products, as aftermarket parts and accessories often require
high-quality plastics and coatings.
Segmental Insights
Type Insights
Based
on Type, the Ortho-Phthalic Anhydride emerged as the dominating
segment in the Indian market for Phthalic Anhydride in 2024. Ortho-Phthalic Anhydride (OPA) is a
crucial raw material for manufacturing phthalate esters, which serve as
essential plasticizers for creating flexible and durable plastics. Beyond its
role in plasticizers, OPA is also used in unsaturated polyester resins found in
a wide range of products, including construction materials, automotive
components, and coatings. The demand for OPA is fueled by its extensive
application across various industries such as construction and automotive.
OPA's
established presence in the chemical industry has led to well-developed
infrastructure and optimized production processes, reinforcing its dominant
market position. The large-scale production facilities and efficient supply
chains contribute to lower production costs, making OPA economically favorable
compared to other types of phthalic anhydride. OPA
is vital in producing alkyd resins and other chemical intermediates used in
numerous industrial applications, ensuring a steady and diverse demand. Its
cost-effectiveness, driven by widespread use and established production
methods, further supports its leading position in the market.
End User Insights
Based
on End User, Electrical and Electronics emerged as the fastest growing segment
in the Indian market for Phthalic Anhydride during the forecast period. The
rapid evolution of electrical and electronics technology is driving the demand
for high-performance materials. Products based on phthalic anhydride, such as
plasticizers and resins, are crucial for manufacturing top-quality cables,
connectors, and components that meet rigorous performance standards. According
to IBEF, between April 2000 and December 2023, the electronic goods sector
attracted FDI inflows totaling USD 4.57 billion. Modern electronics need
data cables that resist heat, chemicals, and electrical interference. Phthalic
anhydride-based plasticizers enhance the flexibility and durability of these
cables through their insulation and sheathing.
The
surge in production of smartphones, tablets, and other consumer electronics has
increased the need for high-quality materials. Phthalic anhydride-based resins
are integral in producing various electronic components, including circuit
boards and connectors, providing the necessary insulation and mechanical
strength for reliable performance.
Electric
vehicles, which require specialized charging cables and components capable of
withstanding high temperatures and electrical stress, also drive demand.
Phthalic anhydride-based materials are used in the insulation and jacketing of
EV charging cables, ensuring both safety and performance as EV production and
infrastructure expand. The push for flexible electronic displays and advanced
sensors necessitates innovative materials. Phthalic anhydride-based polymers
are utilized in flexible substrates and protective coatings, aligning with the
trend towards flexible and wearable electronics.
Regulations
demanding better fire safety in electronic devices have spurred the development
of flame-retardant materials. Phthalic anhydride-based products are key in
these formulations, enhancing fire resistance while maintaining flexibility and
performance. Overall, phthalic anhydride is essential for providing the
advanced materials needed to support these technological advancements and
sector growth.
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Regional Insights
Based
on Region, West India emerged as the dominant region in the Indian market for Phthalic Anhydride in 2024. The Western region is a hub for chemical and
petrochemical industries, with Gujarat standing out for its extensive
industrial infrastructure, including numerous chemical plants and industrial
estates. Prominent companies like Thirumalai Chemicals Ltd and IG
Petrochemicals have established their production facilities here, resulting in
a substantial portion of the nation's phthalic anhydride production being
concentrated in this area. The region benefits from well-developed port
infrastructure, such as the ports of Mumbai and Gujarat, which supports the
import of raw materials and export of finished products, enhancing its role in
industrial activity. Additionally, Gujarat and Maharashtra offer attractive
industrial policies and incentives that draw both domestic and international
investment. The region also enjoys convenient access to essential raw materials
for phthalic anhydride production, including o-xylene and naphthalene, from
both local and global suppliers. The strong demand from key sectors such as automotive,
construction, and paints & coatings further drives the growth and expansion
of production facilities in the Western region.
Recent Development
- In
February 2024, I G Petrochemicals Limited announced that its new brownfield
manufacturing facility, PA-5, located in the Taloja Industrial Area,
Maharashtra, has started production. This facility has a production capacity of
53,000 MTPA of phthalic anhydride.
- In
January 2024, Thirumalai Chemicals Limited announced that its Phthalic
Anhydride plant at the GIDC Estate, Dahej Phase-II, Tal. Vagra, Bharuch,
Gujarat, which had been offline for maintenance since November 2023, has
resumed production.
- In
June 2023, KLJ Group invested USD 145 million to establish a BIS-certified
production facility for plasticizers and phthalic anhydride at the GIDC
Jhagadia Industrial Estate in Bharuch, Gujarat. The facility is designed to
produce 300,000 MT of phthalate plasticizers, 100,000 MT of phthalic anhydride,
3,500 MT of maleic anhydride, and 700 MT of benzoic acid each year.
Key Market Players
- IG Petrochemicals Limited
- Thirumalai Chemicals Ltd.
- SI Group - India Private Limited
- BASF India Limited
- LGC Petrochemical India Pvt. Ltd.
- OCI Company Limited
- KLJ Group
- Vizag Chemical International
- Aekyung Petrochemical Co., Ltd.
- Sanjay Chemicals India Pvt Ltd.
|
By
Type
|
By
Sales Channel
|
By
End User
|
By Region
|
- Ortho-Phthalic
Anhydride
- Isophthalic
Anhydride
- Terephthalic
Anhydride
|
|
- Automotive
- Construction
- Textiles
- Electrical and Electronics
- Pharmaceuticals
- Paints & Coatings
- Others
|
- West India
- North India
- South India
- East India
|
Report Scope:
In this report, the India Phthalic Anhydride Market
has been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- India Phthalic Anhydride Market, By Type:
o Ortho-Phthalic Anhydride
o Isophthalic Anhydride
o Terephthalic Anhydride
- India Phthalic Anhydride Market, By Sales Channel:
o Direct
o Indirect
·
India Phthalic
Anhydride Market, By End
User:
o Automotive
o Construction
o Textiles
o Electrical and Electronics
o Pharmaceuticals
o Paints & Coatings
o Others
- India Phthalic Anhydride 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 Phthalic
Anhydride Market.
Available Customizations:
India Phthalic Anhydride 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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