Naphtha serves numerous purposes. It is used in gasoline cracking, which makes a key element in India’s growing energy market. The petroleum and petrochemical industries are some of the major sources of Naphtha consumption. Besides Naphtha is also used as a solvent in paint, varnish, and soap industries. It is used as fuel in residential heating, cigarette lighters, and stoves. The chemical is widely used as a feed stock in the fertilizer industry as well.
The major source of Naphtha production is petroleum refineries. In addition, they are also produced in the coal industry as well. In FY 23, the total domestic production of Naphtha amounted to 13.8 million tons.
India is slowly and gradually moving up the curve in the global Naphtha value chain. In Apr-Dec 2022, India exported 4.4 million of Naphtha worldwide. During the same time period, the South Asian economy imported 1.3 million tons of Naphtha.
As India aims to become self-reliant under the flagship of Make in India, there will be an increased focus on the chemical and petrochemical industry. As a mainstream chemical, Naphtha will be a party to increased government attention. The import duty on Naphtha has been increased to 2.5% from 1% to discourage import and bolster indigenous production. GOI wants most of the Naphtha used in India to be produced indigenously rather than relying on imports.