India Base Oil Market By Type (Group I, Group II, Group III, Group IV, and Group V), By Application (Automotive Oil, Industrial Oil, Metalworking Fluids, Hydraulic Oil, Greases, and Others), By Region, Competition, Forecast and Opportunities, 2021-2031F

Market Overview

The India Base Oil Market size accounted for 3.62 Billion Litres in 2025 and is predicted to increase from 3.65 Billion Litres in 2026 to approximately 4.52 Billion Litres by 2031, expanding at a CAGR of 3.78% from 2026 to 2031.

Key Takeaways

• By type, the Group II segment accounted for the largest market share, estimated at around 32% in 2025, owing to its favorable balance of performance, cost efficiency, oxidation stability, and broad suitability for automotive and industrial lubricant formulations.
• By application, the automotive oil segment held the largest market share, estimated at around 55% in 2025, supported by its extensive use in engine oils, transmission fluids, gear oils, hydraulic fluids, and automotive greases.
• By region, West India accounted for the largest market share, estimated at around 35% in 2025, driven by its concentration of refining and petrochemical infrastructure, lubricant manufacturing facilities, automotive industries, and strong port connectivity.
• South India is expected to register the fastest growth, supported by expanding automotive and engineering industries, increasing industrialization, growing machinery deployment, established port infrastructure, and rising demand for higher-performance lubricants.
• Expansion of the automotive and manufacturing sectors, increasing adoption of higher-quality base oils, development of premium lubricant formulations, diversification of supply sources, and growing demand for application-specific lubricants are expected to support the long-term growth of the India Base Oil Market.

Market Drivers

Expansion of the Automotive Industry

The expansion of India’s automotive industry is a key growth driver for the base oil market, as engine oils, transmission fluids, gear oils and greases remain major downstream applications. The momentum in vehicle sales is strengthening demand for lubricants and, consequently, base oils. According to the Society of Indian Automobile Manufacturers (SIAM), India recorded 46.43 lakh passenger-vehicle sales and 2.17 crore two-wheeler sales in FY2025-26, representing year-on-year growth of 7.9% and 10.7%, respectively. Commercial-vehicle sales increased 12.6% to 10.80 lakh units. More recently, in Q1 FY2026-27, passenger-vehicle sales rose 25.9% to 12.73 lakh units, while two-wheeler sales grew 20.3% to 56.29 lakh units, reinforcing the expanding automotive lubricant consumption base.

Rising Demand for High-Performance Lubricants

The shift toward high-performance lubricants is supporting demand for higher-quality base oils, particularly Group II and Group III, as modern engines require improved oxidation stability, cleanliness, thermal performance and fuel efficiency. India’s transition to BS-VI emission standards, implemented nationwide in April 2020, has encouraged the adoption of advanced engine technologies and lubricant formulations compatible with sophisticated emission-control systems. The trend is reinforced by strong vehicle sales: passenger-vehicle sales reached a record 46.43 lakh units in FY2025-26, up 7.9%, while commercial-vehicle sales increased 12.6% to 10.80 lakh units. Furthermore, BS-VI OBD Stage II-B requirements apply to vehicles manufactured from April 2025, supporting continued technology upgrades.

Rising Base Oil Imports and Availability of Global Grades

India’s growing dependence on imported base oils is supporting market expansion by improving the availability of premium and specialized grades that may be insufficiently produced domestically. According to government data, India imported 3.00 million tonnes of base oils in 2025, up 10.7% year-on-year, while domestic lubricant and grease consumption increased 9.4% to 4.83 million tonnes. South Korea remained the largest supplier, contributing 1.32 million tonnes, or more than one-third of imports. Imports from Singapore increased 7.2%, while Malaysian shipments rose 94.6%, reflecting increasing availability of Group II and Group III grades. This import-intensive supply structure enables Indian lubricant manufacturers to meet rising demand for higher-performance formulations.

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Market Restraints

High Dependence on Imported Base Oils

India’s significant dependence on imported base oils represents a key restraint, exposing lubricant manufacturers to international price volatility, freight costs, currency movements, geopolitical disruptions, and supply-chain uncertainties. India imported approximately 3.00 million tonnes of base oils in 2025, up 10.7% year-on-year, making it the world’s largest base oil importer. South Korea alone supplied 1.32 million tonnes, accounting for more than one-third of total imports. Dependence on overseas suppliers is particularly relevant for premium Group II and Group III grades, where domestic availability is comparatively constrained. Recent disruptions have demonstrated this vulnerability: imports reached 1.48 million tonnes during January–June 2026, up 33.5% year-on-year, while supply disruptions and freight pressures contributed to market volatility.

Volatility in Crude Oil Prices

Volatility in crude oil prices remains a significant restraint for India’s base oil market because crude is a key feedstock and changes in refinery economics directly influence base oil production costs and pricing. India is particularly exposed to global oil-price movements given its substantial reliance on imported crude. The IEA reported that North Sea Dated crude fell by USD31/bbl during June 2026 to around USD68/bbl by early July, following a sharp recovery in Gulf oil flows. Such rapid price movements can complicate procurement planning, inventory management and margin protection for base oil producers and lubricant blenders. In India, the delivered cost of Iraqi Basrah Medium crude also increased by more than USD5/bbl in June 2025, demonstrating the potential impact on feedstock economics.

Increasing Electric Vehicle Adoption

Increasing electric vehicle (EV) adoption presents a structural restraint for India’s base oil market, particularly by reducing long-term demand for conventional automotive engine oils. Battery-electric vehicles have fewer lubricated engine components and do not require conventional engine oil changes, potentially moderating consumption of base oils used in these formulations. India’s EV transition is gaining momentum: 2.3 million EVs were sold in 2025, compared with around 50,000 units in 2016, representing approximately 46-fold growth. EVs accounted for around 8% of new vehicle registrations in 2025, while government data show registered EVs increased from 1.74 lakh in FY2020 to 19.68 lakh in FY2025. Although internal-combustion vehicles will remain significant, accelerating electrification could constrain future automotive base oil demand.

Market Opportunities

Expansion of Re-Refined Base Oils

India’s Used Oil Extended Producer Responsibility (EPR) framework is creating a significant opportunity for the development of re-refined base oils and organized circular supply chains. Implemented from April 2024, the framework requires producers of base oil and lubricants to meet specified used-oil recycling obligations through registered recyclers. The recycling target is set at 20% for FY2026-27, based on base oil or lubricant volumes sold or imported two years earlier, and is scheduled to increase to 40% in FY2028-29 and FY2029-30, before reaching 50% from FY2030-31 onward. This regulatory progression can encourage investment in collection networks, re-refining facilities and recovery technologies, creating an additional domestic source of base oils while reducing waste and supporting resource efficiency.

Development of Specialty Base Oil Grades

The development of specialty base oil grades represents an opportunity for Indian producers to move toward higher-value applications beyond conventional automotive lubricants. Demand can be targeted across refrigeration oils, metalworking fluids, transformer oils, process oils, hydraulic fluids and specialty greases, where performance characteristics such as viscosity control, thermal stability, oxidation resistance and low-temperature behavior are critical. India’s Bureau of Indian Standards (BIS) continues to develop and update specifications for application-specific lubricants, including refrigeration machinery oils, highlighting the technical differentiation possible in these segments. Government industrial data also recognize base stocks as feedstocks for lubricants used in applications including metal cutting. Developing customized grades can therefore improve margins and reduce exposure to commodity-grade competition.

Opportunities from Green Hydrogen and New Industrial Applications

India’s expanding green-hydrogen ecosystem presents an emerging opportunity for base-oil suppliers to develop specialized lubricants for compressors, pumps, turbines, electrolyser systems and other hydrogen-related equipment. Under the National Green Hydrogen Mission, 8,62,000 tonnes per annum of green-hydrogen production capacity has been awarded to 18 companies, while 3,000 MW per annum of electrolyser manufacturing capacity has been allocated to 15 companies. In addition, 30,000 tonnes per annum of green-hydrogen capacity has been awarded for four refineries as of August 2026. These investments are expected to create new industrial equipment requirements, enabling lubricant and base-oil manufacturers to develop application-specific formulations with enhanced thermal stability, oxidation resistance and equipment protection.

Market Trends

Shift Toward Group II and Group III Base Oils

India’s base oil market is undergoing a gradual transition toward Group II and Group III base stocks, supported by increasing availability of locally produced higher-quality grades and changing lubricant formulation requirements. The trend is reflected in recent capacity additions: IndianOil’s Haldia refinery commissioned a 270,000-tonne-per-year catalytic iso-dewaxing unit in 2024 to produce advanced Group III base stocks. In December 2025, IndianOil also commenced commercial production of Group III/III+ grades, strengthening the domestic supply of premium base oils. Meanwhile, India imported 3.00 million tonnes of base oils in 2025, with South Korea supplying 1.32 million tonnes, indicating the continued importance of international premium-grade supplies.

Increasing Seasonality in Base Oil Procurement

India’s base oil procurement is increasingly influenced by seasonal inventory cycles, particularly the June–September monsoon, when transportation and industrial activity can soften lubricant consumption. Buyers therefore tend to replenish inventories ahead of the monsoon, creating temporary increases in import volumes. In June 2026, India imported 284,607 tonnes of base oils, up 68.2% year-on-year, despite volumes declining 20.9% from May. Cumulative imports during January–June 2026 reached 1.48 million tonnes, 33.5% higher than the corresponding period of 2025. The elevated June arrivals reflected active second-quarter replenishment before the monsoon season. This seasonal purchasing pattern can influence inventory levels, import scheduling, spot-market liquidity and short-term pricing dynamics for Indian base oil buyers.

Increasing Alignment with International Lubricant Standards

India’s base oil and lubricant industry is increasingly moving toward internationally aligned performance specifications as lubricant manufacturers respond to evolving OEM requirements and global quality benchmarks. The Bureau of Indian Standards (BIS) maintains specifications for automotive engine oils and related products, with IS 13656:2019 covering diesel and gasoline engine crankcase oils and defining parameters such as viscosity, oxidation-related performance, pour point, flash point and sulphated ash. BIS reviewed the standard in 2024, while a fourth revision was issued for comments in October 2024, indicating continued evolution of technical requirements. This standardization is encouraging manufacturers to adopt more sophisticated base-stock and additive combinations, improve formulation consistency, and develop products compatible with increasingly demanding vehicle and equipment specifications.

Market Report Coverage and Key Metrics

Market Segmentation Analysis

By Type Insights

Why Did Group II Secure the Largest Share of the India Base Oil Market?

Group II is estimated to account for approximately 32% of India’s base oil market, supported by its favorable balance of performance, availability and cost. Its higher saturates content, lower sulfur level and improved oxidation stability make it suitable for modern lubricant formulations without the cost premium associated with Group III. Group II also offers broad compatibility across automotive and industrial lubricant applications, enabling blenders to use it across multiple formulations. Compared with Group I, it provides superior performance and greater formulation flexibility, while remaining more economical than Group III. Established refining and supply infrastructure further strengthens its accessibility to Indian lubricant manufacturers. These combined technical and economic advantages position Group II as the preferred middle-ground base stock.

By Application Insights

Why Did Automotive Oil Dominate the India Base Oil Market?

Automotive oil is estimated to account for approximately 55% of India’s base oil market, reflecting its broad application across engine oils, transmission fluids, gear oils, hydraulic fluids and automotive greases. The segment benefits from the recurring need to maintain lubrication, wear protection, thermal control and component cleanliness in internal-combustion vehicles. Automotive formulations also consume substantial quantities of base stocks across different viscosity grades and performance levels, creating a diversified demand profile. The extensive presence of passenger vehicles, two-wheelers and commercial vehicles further supports the segment’s breadth. In addition, varied operating conditions and differences in vehicle age and technology require multiple lubricant formulations, sustaining demand for both conventional and higher-performance base oils.

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Market Regional Analysis: South India, North India, West India, East India

Why Did West India Lead the India Base Oil Market?

West India is estimated to account for approximately 35% of India’s base oil market, supported by its concentration of refining, petrochemical, automotive and industrial activity. The region benefits from an integrated petroleum ecosystem, particularly across Gujarat and Maharashtra, which facilitates access to base-oil feedstocks, lubricant manufacturing and downstream consumers. The presence of major refining and lube-oil infrastructure strengthens regional supply availability and distribution efficiency. West India’s extensive port connectivity also supports efficient movement of imported and domestically produced base oils. In addition, established automotive and engineering clusters generate diversified requirements for engine oils, industrial lubricants, process oils and greases. These interconnected supply and consumption centers reinforce the region’s leading position in India’s base oil market.

Why Is South India Expected to Register the Fastest Growth in the India Base Oil Market?

South India is expected to register the fastest growth in India’s base oil market due to the region’s deepening manufacturing ecosystem, expanding automotive production base, and increasing concentration of engineering-intensive industries. Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, and Kerala provide a diverse industrial customer base spanning automobiles, auto components, machinery, electronics, textiles, and process industries. The region’s established ports, including Chennai, Visakhapatnam, and New Mangalore, also facilitate efficient movement of base oils and petroleum products. In addition, the presence of integrated refining and petrochemical infrastructure around Chennai and Mangalore supports regional supply availability. Growing adoption of technologically advanced machinery is expected to favor higher-quality lubricant formulations, strengthening demand for corresponding base oils across automotive and industrial applications.

Key Market Players

• GS Caltex India Pvt Limited
• Indian Oil Corporation Ltd.
• SK Lubricants Co., Ltd.
• Eastern Petroleum Pvt. Ltd
• BP p.l.c
• Shell India Pvt Ltd.
• Hemraj Petrochem Pvt. Ltd.
• Bharat Petroleum Corporation Limited
• GARS Lubricants
• Hindustan Petroleum Corporation Limited

Recent Developments

India’s base oil imports reached 307,422 tonnes in February 2026, increasing 80.9% year-on-year, as lubricant blenders replenished inventories ahead of the fiscal year-end. Imports during January–February reached approximately 515,195 tonnes, up 26.6% year-on-year.

 IndianOil has commenced production of Group III/III+ base oils, supporting domestic supply of premium grades and import substitution. Its Haldia refinery’s 270,000-tonne-per-year catalytic iso-dewaxing unit produces Group III base stocks alongside specialty grades.

Report Scope:

By Type

• Group I
• Group II
• Group III
• Group IV
• Group V

By Application

• Automotive Oil
• Industrial Oil
• Metalworking Fluids
• Hydraulic Oil
• Greases
• Others

By Region

• South India
• North India
• West India
• East India

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the India Base Oil Market.

Available Customizations:

India Base Oil market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information