India Industrial Gas Market Outlook to 2028

India Industrial Gas Market Overview

The India Industrial Gas Market was valued at USD 3.60 billion in 2023, driven by the increasing demand from industries such as chemicals, steel, healthcare, and food processing. Industrial gases like oxygen, nitrogen, hydrogen, and argon are vital components for these sectors, supporting processes like welding, cutting, cooling, and manufacturing. The market is characterized by diverse applications and a growing focus on eco-friendly and sustainable gas solutions.

Major players in the Indian industrial gas market include Linde India Limited, Air Liquide India, Praxair India, and Inox Air Products. These companies dominate the market through substantial investments in gas production facilities, pipeline networks, and innovative technologies to meet the rising demand across various industries.

The demand for industrial gases is high in sectors such as healthcare (for medical oxygen), metallurgy (for argon and oxygen), and food processing (for nitrogen). Industrial hubs like Gujarat, Maharashtra, and Tamil Nadu are witnessing substantial consumption of industrial gases due to their developed infrastructure and large-scale manufacturing activities.

Linde India Limited plans to invest over USD 150 million by 2025 in setting up new air separation units and expanding its existing capacities to cater to the increasing demand in the healthcare and manufacturing sectors. This investment is aligned with the company's goal to enhance production efficiency while adhering to stringent environmental regulations.

India Industrial Gas Market Segmentation

The India Industrial Gas Market is segmented based on type, application, and region.

By Gas Type: The market is segmented into oxygen, nitrogen, hydrogen, carbon dioxide, and others. In 2023, oxygen dominated the market due to its widespread use in healthcare and steel production. Nitrogen and hydrogen are also experiencing increased demand, particularly in the electronics and energy sectors. Linde India Limited and INOX Air Products are key players leading this segment.

By Application: The market is categorized into manufacturing, healthcare, energy, and infrastructure development. Manufacturing held the largest market share in 2023, driven by the use of gases in sectors such as chemicals, metals, and electronics. Healthcare is another rapidly growing segment, especially due to the need for medical oxygen in hospitals. The energy sector, with its focus on hydrogen-based clean energy solutions, is expected to witness robust growth in near future.

By Region: The market is divided into North, South, East, and West. In 2023, West India, particularly Gujarat and Maharashtra, led the market due to the presence of numerous manufacturing hubs. South India, with its growing healthcare infrastructure and industrial expansion, is also seeing a significant rise in demand for industrial gases.

India Industrial Gas Market Competitive Landscape

Company Name

Establishment Year

Headquarters

Linde India Limited

1935

Kolkata, India

Praxair India Private Ltd

1996

Bengaluru, India

Air Liquide India

1902

Mumbai, India

INOX Air Products

1963

Mumbai, India

Ellenbarrie Industrial Gases

1973

Kolkata, India

Air Liquide India: In 2023, Air Liquide India established a new air separation unit (ASU) in Mathura, Uttar Pradesh, with an investment of USD 42 million. The new unit has a production capacity exceeding 300 tonnes of liquid oxygen and medical oxygen daily, along with around 45 tonnes of liquid nitrogen and 12 tonnes of liquid argon per day.

Inox Air Products: Inox Air Products signed a USD 3 billion Mo U with the Maharashtra government to set up the state's first 500,000 MTPA green ammonia plant. The project is expected to be commissioned within 3-5 years. The companys focus on green hydrogen production is also gaining momentum, contributing to the clean energy sector.

India Industrial Gas Market Analysis

Growth Drivers:

Increasing Demand from the Manufacturing Sector: The Indian manufacturing sector, which heavily relies on industrial gases like oxygen, nitrogen, and hydrogen, has been expanding rapidly in 2024 due to the government's focus on infrastructure and industrial development. According to the World Bank and other sources, the manufacturing sector in India is projected to have grown by 9.9% in FY 2023-24, driving higher consumption of industrial gases, especially in the steel, chemical, and automotive industries. This growth is being fueled by large-scale projects, such as the Bharatmala Pariyojana and Make in India.

Rising Demand for Medical Oxygen: The demand for medical oxygen has surged significantly since 2020, with continued growth in 2024 due to the expansion of healthcare infrastructure and the increasing number of critical care facilities. The Indian government, through the PM CARES Fund, set up more than 551 Pressure Swing Adsorption (PSA) oxygen plants across hospitals in 2023. This increased production capacity has boosted the medical gases segment, and with ongoing healthcare reforms, the demand for medical oxygen is expected to remain high.

National Hydrogen Mission's Impact on Hydrogen Demand: The Indian governments National Hydrogen Mission, launched in 2021, is playing a pivotal role in promoting the production and use of green hydrogen as a clean fuel. The Indian government has indeed identified multiple states, including Gujarat, Maharashtra, and Tamil Nadu, as key areas for green hydrogen production under its National Green Hydrogen Mission. The mission aims to promote the development of green hydrogen production capacity of at least 5 million metric tonnes per annum by 2030, with associated renewable energy capacity addition of about 125 gigawatts (GW) in the country.

Challenges
:

Rising Energy Costs Impacting Production: The production of industrial gases is energy-intensive, and the rising cost of electricity and other forms of energy has significantly increased production costs for industrial gas companies. In 2024, India saw substantial increase in electricity tariffs for industrial use due to higher fuel costs and increased demand for power.

Stringent Environmental Regulations: The industrial gas sector is heavily regulated due to its environmental impact, particularly concerning emissions during gas production and transportation. In 2024, India strengthened its environmental policies to meet global carbon reduction targets, compelling gas manufacturers to invest in cleaner technologies and sustainable practices.

Government Initiatives

National Hydrogen Mission: The Indian government has approved the National Green Hydrogen Mission with an initial outlay of USD 2.4 billion to make India a global hub for producing, using and exporting green hydrogen and its derivatives by 2030. This initiative is aimed to attract over USD100 billion in investments and create over 6 lakh jobs by 2030.

PLI Scheme for Industrial Gas Producers: In 2024, the Indian government announced the inclusion of the industrial gas sector under the Production-Linked Incentive (PLI) Scheme. This scheme aims to incentivize local production of gases like nitrogen and oxygen. The PLI scheme is expected to boost domestic production capabilities, encourage the use of cleaner technologies, and reduce imports.

India Industrial Gas Market Future Outlook

The India Industrial Gas Market is expected to grow substantially over the forecast period, driven by the expanding manufacturing and healthcare sectors, government initiatives for clean energy, and advancements in gas production technologies.

Future Market Trends

Green Hydrogen to Lead the Transition to Clean Energy: By 2028, green hydrogen will play a critical role in Indias clean energy transition. The governments ongoing investment in hydrogen infrastructure, including production hubs and hydrogen-powered transportation, will significantly increase the demand for hydrogen gas. This shift will position hydrogen as a key growth driver for the industrial gas market.

Increased Automation and Digitalization in Gas Production: Automation and digitalization are set to revolutionize the Indian industrial gas market by 2028. Companies will increasingly adopt AI and Io T technologies to optimize gas production and distribution. In the next five years, AI-driven systems for predictive maintenance and real-time monitoring are expected to become standard across large gas production facilities.
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