India Industrial Lubricant Market, By Region, Competition, Forecast and Opportunities, 2020-2030F

Report
85 Pages
August 2024
Region: India
TechSci Research
ID: 5229133

India Industrial Lubricant Market was valued at USD 7.25 Billion in 2024 and is expected to reach USD 9.22 Billion by 2030 with a CAGR of 4.28% during the forecast period. Industrial lubricants are essential for minimizing friction, wear, and corrosion between moving parts in machinery and equipment. They play a pivotal role in ensuring the efficiency and longevity of industrial systems. These lubricants come in various forms to meet different operational needs. Oils, for example, can be mineral-based, synthetic, or semi-synthetic, each offering distinct benefits depending on the application. Greases, which blend oils with a thickening agent like soap, provide long-lasting lubrication in scenarios where oils alone might not adhere effectively. Solid lubricants, such as graphite or molybdenum disulfide, are used in environments where liquid lubricants are unsuitable. Hydraulic fluids are crucial for transferring power and lubricating hydraulic systems, maintaining their effectiveness under high pressure and temperature conditions.

The growth in manufacturing and heavy industries significantly drives the demand for high-quality lubricants. As production facilities expand and infrastructure projects increase, the need for reliable lubricants to maintain machinery performance becomes more pronounced. Government initiatives like Make in India and investments in infrastructure are contributing to the expansion of the industrial sector, thereby indirectly boosting the demand for lubricants. However, fluctuations in raw material prices, such as crude oil, can impact lubricant pricing, affecting market stability and profitability.

The rise of bio-based and synthetic lubricants presents competition to traditional mineral oils, compelling existing players to innovate and adapt. Despite these challenges, the Indian industrial lubricant market is expected to continue its growth trajectory. This growth will be driven by ongoing industrial development, technological advancements, and a shift toward more sustainable and efficient lubricants. Government support for industrialization is likely to further shape the future dynamics of the market.

Key Market Drivers

Growth of Automotive Sector

As the automotive sector grows, vehicle production encompassing both passenger and commercial vehicles rises accordingly. This expansion drives increased demand for a range of lubricants, such as engine oils, transmission fluids, and other automotive fluids essential for vehicle assembly and maintenance. According to Invest India, from April 2023 to March 2024, the automotive sector produced 28.43 million vehicles, including passenger cars, commercial vehicles, three-wheelers, two-wheelers, and quadricycles.

Modern vehicles, equipped with advanced technologies, require high-performance lubricants to ensure optimal functionality. The automotive industry's emphasis on enhancing fuel efficiency, reducing emissions, and improving performance further fuels the demand for specialized and high-quality lubricants. Additionally, the growing vehicle fleet boosts demand for automotive lubricants in the aftermarket segment, as regular maintenance and servicing rely on a steady supply of engine oils, brake fluids, and coolants.

The introduction of new technologies, such as electric and hybrid vehicles, necessitates the development of advanced lubricants tailored to these systems. Government incentives and subsidies designed to support the automotive industry, including those for electric vehicles and manufacturing hubs, drive sector growth and subsequently increase the demand for automotive lubricants. For instance, Phase II of the FAME India Scheme has allocated USD 693 million in subsidies to electric vehicle manufacturers, facilitating the sale of 1,341,459 electric vehicles. Additionally, rising disposable incomes allow more consumers to purchase vehicles, which expands the vehicle fleet and leads to higher lubricant consumption for both new and existing vehicles.

Growth of Manufacturing and Heavy Industries

As manufacturing and heavy industries expand, there is a growing need for machinery and equipment, which in turn drives up the demand for industrial lubricants essential for ensuring the smooth operation and durability of these assets. According to IBEF, India's manufacturing sector is projected to reach USD 1 trillion by 2025-26, with Gujarat, Maharashtra, and Tamil Nadu leading this growth due to investments in the automotive, electronics, and textile industries.

The development of new manufacturing plants and heavy industry facilities requires a substantial increase in lubricants for the installation, maintenance, and operation of machinery and production lines. The Ministry of Heavy Industries (MHI) has introduced several strategic initiatives to establish India as a global supplier of Original Equipment Manufacturers (OEMs). The Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry, with a budget of USD 3.11 billion, supports the production of Advanced Automotive Technologies (AAT), including electric vehicles and their components.

Under the Atmanirbhar Bharat Initiative, five positive indigenization lists totaling 509 products have been issued by the Department of Military Affairs and the Ministry of Defence to encourage domestic manufacturing for the defense sector. The growth in manufacturing and heavy industries also drives significant infrastructure development, such as new factories, warehouses, and transport facilities, increasing the demand for lubricants used in these construction and infrastructure projects. As industrial activities expand, the need for regular maintenance and servicing of machinery becomes more crucial, thereby boosting demand for a variety of industrial lubricants used for cooling, lubrication, and protection.

Key Market Challenges

Price Fluctuations

The primary raw materials for many industrial lubricants come from crude oil and other petrochemicals. Variations in crude oil prices can lead to unpredictable raw material costs, which directly influence lubricant production expenses. Sharp increases in these raw material prices can result in higher lubricant costs, affecting the overall financial structure for industries. Manufacturers often face challenges in maintaining profit margins during periods of price volatility. They may need to either absorb these extra costs, which can reduce profit margins, or pass them on to customers, potentially making their products less competitive.

Price volatility can also disrupt supply chains, impacting both the availability and cost of lubricants. This volatility can spark price wars among suppliers, which might erode profit margins and create market instability. Companies with long-term contracts or pricing agreements may struggle to adjust terms in response to fluctuating raw material costs, potentially leading to financial imbalances for both suppliers and buyers. Overall, price fluctuations contribute to market volatility, complicating demand forecasting, pricing strategies, and future growth planning, and may deter investment and strategic initiatives in the lubricant sector.

Infrastructure and Logistical Inefficiencies

Inadequate infrastructure, including insufficient road networks and transportation facilities, can cause delays in lubricant deliveries. These delays disrupt the supply chain and affect the timely availability of products, which in turn impacts manufacturing and operational schedules for end-users. Logistical inefficiencies and poor infrastructure often result in higher transportation and storage costs, which can drive up lubricant prices. This increase can reduce market competitiveness and negatively affect profit margins for both suppliers and consumers.

Poor infrastructure can also create bottlenecks in the supply chain, leading to inventory shortages and challenges in meeting market demand. This can result in missed sales opportunities and strained customer relationships. Issues such as unreliable transportation services and limited warehousing capabilities can hinder the smooth operation of lubricant distribution, reducing efficiency and complicating supply chain management.

Inefficiencies in infrastructure and logistics can lead to longer delivery times for lubricants, disrupting production schedules for industries that depend on timely supplies. Furthermore, inadequate infrastructure can limit access to emerging and expanding markets within India, preventing companies from leveraging growth opportunities in new regions.

Key Market Trends

Shift Towards Synthetic and Bio-Based Lubricants

There is a growing trend towards synthetic and bio-based lubricants due to their superior performance and environmental benefits. Synthetic lubricants are preferred for their enhanced high-temperature stability, extended service life, and improved efficiency over traditional mineral oils. Bio-based lubricants are becoming popular for their eco-friendly properties and biodegradability. For example, in April 2024, Savsol Lubricants launched Savsol Ester 5, a biodegradable lubricant aimed at high-end applications in the automotive and railway sectors. This product is derived from edible oil fatty acids and features proprietary molecules developed in-house.

The market is also embracing advanced lubrication technologies to meet the needs of modern machinery. This includes high-performance lubricants tailored for specific applications, such as those operating in extreme temperatures or precision environments. Uno Minda released its BS VI compliant automotive engine oils in 2023. The PerfoMaxx range includes mineral oils for 100cc - 125cc bikes and scooters, Purosynth semi-synthetic oil for 125cc - 150cc bikes, and Ultimo fully synthetic oil for bikes over 150cc.

There is an increasing focus on energy-efficient lubricants designed to reduce friction and enhance the overall efficiency of industrial equipment. This trend supports broader industry goals of improving operational efficiency and cutting energy consumption. For instance, In June 2023, Shell introduced new synthetic engine oils in India, including Helix HX6 5W-30 and Shell Helix SUV 5W-30. These oils offer Active Cleansing Technology to provide advanced engine protection, reduce wear and tear, and prevent sludge and deposit build-up.

There is a rising demand for lubricants that extend service intervals and provide better protection against wear and tear. This trend is driven by industries aiming to lower maintenance costs and reduce downtime. These developments reflect a dynamic and evolving industrial lubricant market in India, influenced by technological advancements, regulatory changes, and shifting consumer preferences.

Segmental Insights

Product Type Insights

Based on Product Type, the Industrial Engine Oil emerged as the dominating segment in the Indian market for Industrial Lubricant in 2024. Industrial engine oils are utilized across a broad spectrum of machinery and equipment in sectors such as automotive, manufacturing, construction, and agriculture. Their versatility and critical role in ensuring the performance and longevity of engines contribute significantly to their market leadership. The automotive sector is a major consumer of these oils. As vehicle production and sales increase, so does the need for engine oils to maintain both new and existing vehicles. These oils are vital for lubrication, cooling, and protection against wear, making them essential in this industry. Regular lubrication of industrial engines is necessary for their efficient and reliable operation, driving ongoing demand for engine oils. For instance, in 2023, Gulf Oil Lubricants India Ltd. expanded its offerings in the Indian market by introducing the S-OIL SEVEN range through a strategic alliance. Gulf Oil will oversee the production, distribution, and marketing of this premium range, which includes fully synthetic, semi-synthetic, and high-performance lubricants, through the KIA India dealer network. The widespread availability of engine oils through established distribution channels further supports their market dominance, as consumers can easily obtain and replace these crucial lubricants.

End User Insights

Based on End User, Automotive emerged as the dominating segment in the Indian market for Industrial Lubricant in 2024. The automotive sector consistently requires lubricants due to the ongoing need for vehicle maintenance and servicing. Engine oils, transmission fluids, and other automotive lubricants are crucial for ensuring the smooth operation and longevity of both passenger and commercial vehicles. India’s vehicle fleet is large and expanding, encompassing cars, trucks, motorcycles, and commercial vehicles. This growth ensures a constant demand for automotive lubricants to maintain optimal vehicle performance. According to Invest India, the truck market in India is projected to grow over fourfold by 2050, with the number of trucks expected to increase from 4 million in 2022 to approximately 17 million by 2050. The rise in vehicle production and sales drives the need for lubricants, both for new vehicles and as replacements for existing ones. The expansion of automotive infrastructure, including service centers, dealerships, and maintenance facilities, further fuels the demand for automotive lubricants by creating more sales and distribution opportunities. Additionally, advancements in vehicle technology, such as new engine types and higher performance standards, necessitate the use of specialized and high-quality lubricants. Efforts to improve fuel efficiency and reduce emissions have also increased the demand for advanced lubricants in the automotive sector.

Regional Insights

Based on Region, West India emerged as the dominant region in the Indian market for Industrial Lubricant in 2024. Maharashtra and Gujarat are among India’s most industrialized states, hosting a wide array of industries such as automotive, chemicals, textiles, and machinery, all of which require significant amounts of industrial lubricants. Gujarat has become a major industrial hub, with thriving sectors like petrochemicals, textiles, and manufacturing. The state's supportive policies and infrastructure development contribute to its robust industrial activity. In April 2024, Gujarat Gas (GGL) and Indian Oil Corporation (IOCL) signed a non-binding memorandum of understanding (MoU) to enhance energy solutions for consumers. Under this MoU, IOCL will supply liquid fuels and automotive lubricants, greases, and specialty products at GGL outlets. Additionally, IOCL will establish a CNG facility at its COCO outlets, while GGL will set up a CNG mother facility at IOCL locations.

Mumbai, India’s financial capital, and Pune are prominent industrial centers with significant automotive manufacturing, electronics, and machinery industries. Pune is noted for its automotive and engineering sectors. In 2023, Toyo Engineering India Pvt. Ltd., a subsidiary of Toyo Engineering Corporation, secured a contract from ExxonMobil Lubricants Private Limited (EMLPL) for the engineering, procurement, construction, and commissioning of a 159,000 KL/annum lubricant manufacturing plant in Isambe, Maharashtra. This plant is anticipated to commence commercial operations by late 2025.

The West region benefits from well-established industrial zones and economic corridors. The robust logistics and transportation infrastructure, including highways and rail networks, facilitate the efficient distribution of industrial lubricants. Gujarat’s strong petrochemical sector further drives the demand for specialized lubricants used in processing and manufacturing. Known for its business-friendly environment and favorable industrial climate, the West region, particularly Gujarat, attracts companies and supports growth in the lubricants market.

Key Market Players

Gulf Oil Lubricants India Limited
Hindustan Petroleum Corporation Limited
Castrol India Limited
SAVITA OIL TECHNOLOGIES LIMITED
Shell Energy India Private Limited
Tide Water Oil Co. (India) Ltd.
Indian Oil Corporation Limited
Valvoline Cummins Private Limited
TotalEnergies Marketing India Private Limited.
Bharat Petroleum Corporation Limited

Report Scope:

In this report, the India Industrial Lubricant Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

India Industrial Lubricant Market, By Product Type:

Metal Working Fluid
Industrial Engine Oil
Hydraulic Oil
Grease
Gear Oil
Compressor Oil
Bearing Oil
Others

India Industrial Lubricant Market, By Application:

Machining
Hydraulics
Gear
Bearing
Turbine
Air Compressor
Others

India Industrial Lubricant Market, By End User:

Power and Oil & Gas
Construction & Mining
Automotive
Metallurgy
Chemical
Others