Indian paint industry’s beginning can be traced back to the first factory set up in Howrah, Kolkata in 1902 by Shalimar Paint Colour and Varnish Company. The company started by two British entrepreneurs paved the way for many more British companies to follow – Goodlass Walls (now Kansai Nerolac), ICI, British Paints (now Berger), Jenson & Nichcolson and Blundell & Eomite (now Garware Paints). 1942 saw the birth of an indigenous paint company, in Mumbai, which grew rapidly to become the market leader in the 60s and maintained that position ever since – Asian Paints.

Paints and coatings are utilized in the architectural, automotive, wood, industrial, transportation, and packaging industries. They are intended for several applications, such as corrosion resistance, damage prevention, decorative reasons, and others.

The Indian paints and coatings market is segmented by technology, resin type, and end-user industry. Through technology, the market is segmented into water-borne coatings, solvent-borne coatings, powder coatings, and radiation-cured coatings. Through resin type, the market is segmented into acrylic, alkyl, polyurethane, epoxy, polyester, and other resin types. By end-user industry, the market is segmented into architectural, automotive, wood, protective coatings, general industrial, transportation, and packaging.

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According to the leading paint manufacturer, India’s paints and coatings industry is expected to reach US$ 12.22 billion (Rs. 1 lakh crore) in the next five years. The company stated in its most recent annual report that the paints and coatings industry is currently valued at about US$ 7.57 billion (Rs. 62,000 crore).

The paints and coatings industry include a wide range of products, with the architectural sector dominating the industry with a volume share of 69% and the industrial sector with a share of 31%. During the fiscal year 2022-23, the prices of raw materials decreased from their prior highs, which was a favourable development for the paints and coatings industry.

The raw materials make up between 55-60% of all input costs, although price changes for crude and other essential components have improved industry margins. Additionally, the economy’s growth, which is driven by variables like income levels and infrastructure development, is closely connected to the paints and coatings industry.

Despite potential risks from fluctuating crude prices, macroeconomic climate, and inflationary pressures, the industry, has a promising outlook. India is expected to grow at a medium pace of 6-7%.

1. Impact of crude oil prices: Raw materials like phthalic anhydride, pentaerythritol, methyl methacrylate, aromatics, etc., which act as binders, solvents and additives, are derivatives of crude oil. In fact, nearly 50 percent of raw materials used by paint companies are crude oil derivatives and account for about 30-35 percent of the total raw material cost of the Indian paint industry. Volatile crude oil and derivative prices pose a risk to the profitability of Indian paint and coatings producers.  There is a growing tendency among the Indian paint companies to incline towards manufacturing water-based paints which are less sensitive to movement in crude oil prices. Besides, the preference for these paints over solvent paints is also rising among customers because of ease to clean walls and increasing demand of these paints from the building and construction and automotive sector owing to their good corrosion protection and high gloss properties, over other types. This has led to focus by most of the paint companies to consistently increase the share of water-based paints in their portfolio which is expected to aid margin growth in the long term. However, demand for oil/solvent-based paints will always remain, hence exposure to price fluctuations in crude oil cannot be eliminated completely. Smaller paint producers don’t have bargaining clout as of large scale paint producers. Large paint producing companies always have an option of increasing their prices when raw material prices go up. But, for smaller producers it is very difficult to increase the prices as majority of the customers are based in small towns and rural areas, who are very price sensitive.
2. TiO2 issue: Titanium dioxide pigment, forming around 25 percent of the total content of paint, is by far the most important material used by the paint industry due its ability to bend and scatter light. It is commercially available in two forms – Anatase and Rutile. Of these two forms, Rutile TiO2 is more durable and stable and is also considered to be more efficient in scattering light; while anatase pigments are used mostly in cheap dispersion paints, self-cleaning paints and in road marking paints. Application of rutile pigments is much broader and in practice covers all paint types.  Around 70 percent of the India’s domestic demand for TiO2 is met through import deliveries and China is the leading exporter of TiO2 to India. Steady growth of TiO2 production in China in 2018 and first half of 2019 kept the TiO2 prices in check. High volatility in Rupee in 2019 has made the imports costlier for Indian paint producers by a similar amount. However, domestic production (and prices) of TiO2 is expected to pose problems for Indian paint producers in coming years on account of ban on mining of beach minerals by Indian government. Beach minerals ilmenite and rutile are the basic feedstock for the manufacture of TiO2. Indian government’s ban in 2019 on mining of beach minerals by private companies has affected the whole chain of inter-related connected producer and user industries. It is expected that the real impact of this ban will have a major impact on TiO2 production.

India’s total trade for Paints, Printing Ink and Allied Products have reached to US$ 5478.01 million during 2022-23. India’s exports of Paints, Printing Ink and Allied Products are US$ 1643.14 million during 2022-23. Imports of Paints, Printing Ink and Allied Products into India have reached to US$ 3834.87 Million in 2022-23.