Report Description

    Forecast Period


    Market Size, By Volume (2024)

    330.08 thousand Metric Tonnes

    CAGR (2025-2030)


    Fastest Growing Segment

    Gasoline Blending

    Largest Market

    West India

    Market Size (2030)

    434.68 thousand Metric Tonnes

    Market Overview

    India Methanol Market achieved a total market volume of 330.08 thousand Metric Tonnes in 2024 and is poised for strong growth to reach 434.68 thousand Metric Tonnes in 2030, with a projected Compound Annual Growth Rate (CAGR) of 4.73%

    The India methanol market is poised for significant growth in the projected period until 2030. This growth is attributed to the government's efforts to promote methanol as a transportation fuel, which includes initiatives such as setting up methanol fuel stations and retrofitting existing vehicles to run on methanol. Additionally, ongoing research and development aim to manufacture methanol-powered vehicles and engines optimized for efficient combustion.

    Beyond transportation, methanol holds substantial potential for industrial and power generation applications. It can serve as a feedstock for producing chemicals, plastics, and pharmaceuticals, thus reducing reliance on imported raw materials. Methanol can also be utilized in fuel cells for electricity generation, offering an alternative to traditional fossil fuel-based power generation methods.

    According to NITI Aayog, the methanol economy is expected to create approximately five million jobs through methanol production, application, and distribution services. Moreover, blending 20% di-methyl ether (DME), a methanol derivative, in LPG could result in annual savings of USD 724.63 crore. Although India traditionally relied on methanol imports to meet domestic demand, the country is now prioritizing self-sufficiency and reducing import dependency. Government initiatives and policies have been introduced to incentivize domestic methanol production and attract investments in the sector.

    With India's growing population and expanding economy, there is an increasing demand for energy, necessitating exploration of alternative energy sources like methanol. Its versatility allows it to be used as a vehicle fuel, cooking alternative to LPG, power generation source, and industrial feedstock. The clean-burning nature and lower carbon emissions of methanol compared to conventional fuels make it an appealing option for achieving sustainability objectives.

    The chemical industry stands as a significant consumer of methanol, utilizing it as a foundational component for various products such as plastics, paints, and solvents. India's expanding chemical sector presents ample opportunities for methanol utilization. By advocating methanol as a substitute for traditional feedstocks, the nation can reduce its reliance on fossil fuels and transition towards a more sustainable chemical manufacturing landscape. India methanol market is on the cusp of substantial growth, driven by government initiatives, technological advancements, and increasing awareness of its benefits across various sectors. As the country continues to prioritize sustainability and energy security, methanol emerges as a key player in shaping the future of India's energy and chemical industries.

    Key Market Drivers

    Growing Use of Methanol in the Transportation Sector Propels Indian Methanol Market Growth

    The growing use of methanol in the transportation sector is a significant driver propelling the growth of the Indian methanol market. Methanol, also known as wood alcohol, holds promise as a viable alternative fuel for vehicles due to its cleaner combustion properties and lower emissions compared to traditional fossil fuels such as gasoline and diesel.

    One of the key factors driving the adoption of methanol in the transportation sector is the Indian government's initiatives to promote alternative fuels and reduce vehicular emissions. Methanol is considered a "green fuel" as it can be produced from various renewable sources such as biomass, municipal solid waste, and carbon dioxide. As part of its commitment to cleaner energy, the government has introduced policies and incentives to encourage the use of methanol-blended fuels and methanol-powered vehicles.

    The introduction of methanol fuel stations and the retrofitting of existing vehicles to run on methanol are key initiatives undertaken to facilitate the transition towards methanol-based transportation. Methanol-blended fuels, such as M15 (15% methanol blended with gasoline), are being promoted as a cleaner and more sustainable alternative to conventional fuels. Additionally, research and development efforts are underway to develop methanol-powered vehicles and engines optimized for methanol combustion efficiency.

    One of the primary advantages of methanol in the transportation sector is its versatility. Methanol can be used as a standalone fuel or blended with gasoline or diesel to reduce emissions and improve fuel efficiency. It can also be used in fuel cells to generate electricity for electric vehicles, offering a renewable energy solution for the transportation sector.

    Methanol offers several logistical advantages over other alternative fuels. It can be produced domestically, reducing dependence on imported fossil fuels, and enhancing energy security. The availability of methanol as a feedstock for fuel production ensures a stable and reliable supply chain, mitigating the risks associated with fluctuations in global oil prices and geopolitical tensions.

    The adoption of methanol in the transportation sector also aligns with India's commitment to sustainable development and environmental conservation. Methanol has lower emissions of greenhouse gases and air pollutants compared to conventional fuels, contributing to improved air quality and reduced carbon footprint. By transitioning to methanol-based transportation, India can achieve its climate goals and reduce its reliance on fossil fuels, thus contributing to global efforts to combat climate change.

    The growing use of methanol in the transportation sector is driving the expansion of the Indian methanol market. Government initiatives, technological advancements, and environmental concerns are driving the adoption of methanol as a cleaner and more sustainable fuel option for vehicles. As the transportation sector embraces methanol as an alternative fuel, the Indian methanol market is poised for significant growth in the coming years.

    Rising Demand from the Chemical Industry Propels India's Methanol Market Growth

    The burgeoning demand from the chemical industry is a significant factor propelling the growth of India's methanol market. Methanol serves as a crucial raw material and feedstock for a wide array of chemical products, making it an indispensable component in various manufacturing processes.

    One of the primary drivers of methanol demand in the chemical industry is its versatility as a building block for numerous chemical compounds. Methanol is used as a key ingredient in the production of various chemicals such as formaldehyde, acetic acid, olefins, and methyl methacrylate, among others. These chemicals have diverse applications across industries, including pharmaceuticals, plastics, textiles, paints, and adhesives, driving the demand for methanol as a feedstock.

    Moreover, methanol's properties make it an attractive choice for chemical manufacturers. It is a cost-effective and efficient precursor for synthesizing a wide range of chemical compounds. Methanol-based processes offer advantages such as high yields, simplified reaction pathways, and lower production costs, making them preferred options for chemical synthesis.

    The growth of India's chemical industry further amplifies the demand for methanol. India's chemical sector is experiencing robust growth, driven by factors such as increasing industrialization, urbanization, and rising consumer demand. The country's chemical industry encompasses a diverse range of segments, including petrochemicals, specialty chemicals, agrochemicals, and pharmaceuticals, all of which rely on methanol as a vital input.

    The government's focus on promoting domestic manufacturing and self-reliance has led to initiatives aimed at boosting the chemical sector. Policies such as "Make in India" and incentives for setting up chemical manufacturing units have encouraged investment in the sector, driving demand for methanol as a raw material.

    Methanol's eco-friendly characteristics are garnering attention from chemical manufacturers. As environmental concerns become more prominent, there is a growing emphasis on sustainable and green chemistry practices. Methanol, being a cleaner-burning fuel with lower emissions compared to conventional fossil fuels, aligns with these sustainability objectives, further driving its adoption in the chemical industry.

    The rising demand from the chemical industry is a key driver fueling the growth of India's methanol market. As chemical manufacturers continue to expand their production capacities and diversify their product portfolios, the demand for methanol as a versatile and essential raw material is expected to surge. The chemical industry's reliance on methanol underscores its pivotal role in driving the growth and development of India's methanol market.

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    Key Market Challenges

    High Initial Costs

    The growth of the India Methanol Market faces obstacles due to the high initial costs associated with establishing methanol production facilities. Setting up methanol production plants requires significant investment in infrastructure, technology, and skilled labor, which can pose financial challenges for market participants. High initial capital outlay deters potential investors and inhibits the expansion of methanol production capacity, limiting the market's growth potential.

    Moreover, the complexities involved in securing financing for large-scale methanol projects further compound the issue. The need for substantial upfront investments acts as a barrier to entry for new players in the market and hampers the development of a robust methanol industry in India. Addressing the challenge of high initial costs requires innovative financing mechanisms, government incentives, and strategic partnerships to attract investment and promote the sustainable growth of the India Methanol Market.

    Fluctuating Prices of Raw Materials

    The India Methanol Market faces challenges stemming from the fluctuating prices of raw materials, hindering its growth trajectory. Raw materials play a crucial role in methanol production, and any instability in their prices can disrupt the market dynamics. Volatility in the prices of feedstocks such as high ash coal, agricultural residue, and natural gas directly impacts the production costs of methanol, affecting its competitiveness in the market.

    Additionally, uncertainties surrounding the availability and accessibility of raw materials further exacerbate the situation. Fluctuating raw material prices pose challenges for market players in terms of production planning, cost management, and pricing strategies, leading to uncertainties and inconsistencies in the India Methanol Market. Addressing these challenges requires a concerted effort from stakeholders to develop strategies for mitigating risks associated with raw material price fluctuations and ensuring a more stable and sustainable growth trajectory for the market.

    Key Market Trends

    Growing Support for the Methanol Economy

    Methanol, a low-carbon hydrogen carrier fuel derived from high ash coal, agricultural residue, CO2 from thermal power plants, and natural gas, stands as a pivotal solution for India's COP 21 commitments. NITI Aayog's 'Methanol Economy' initiative aims to curtail India's oil import bill and greenhouse gas emissions while repurposing coal reserves and municipal solid waste into methanol.

    Despite its slightly lower energy content compared to petrol and diesel, methanol presents a versatile alternative for various sectors, including transportation, energy, and cooking. Blending 15% methanol in gasoline can lead to significant reductions in fuel imports and greenhouse gas emissions, enhancing urban air quality.

    The Methanol Economy initiative is projected to generate around 5 million jobs and save Rs 6000 crore annually by blending 20% DME (Di-methyl Ether) in LPG. Regulatory bodies like the Bureau of Indian Standards have endorsed methanol blending standards, facilitating its adoption in various sectors, including transportation and cooking.

    Assam Petrochemicals' pioneering methanol cooking fuel program, launched in October 2018, exemplifies the shift towards cleaner and more cost-effective cooking mediums. Moreover, plans for establishing methanol production plants, DME plants, and natural gas-based methanol production facilities underscore India's commitment to fostering a sustainable energy ecosystem.

    Innovations such as Thermax's methanol-based reformer and Kirloskar Oil Engines' methanol-powered generator sets showcase the industry's strides towards embracing methanol as a viable energy source. Additionally, research and development initiatives by organizations like BHEL, Thermax, and IIT Delhi aim to develop indigenous technologies for methanol production from coal and biomass, further bolstering India's methanol ecosystem.

    Shift Towards Renewable Methanol

    A significant trend shaping the growth trajectory of the India Methanol Market is the shift towards renewable methanol. With increasing environmental concerns and a growing emphasis on sustainability, renewable methanol has emerged as a key focus area for industry. Unlike conventional methanol production methods, which rely on fossil fuels such as natural gas and coal, renewable methanol is produced from renewable feedstocks such as biomass, municipal waste, or carbon dioxide (CO2) captured from industrial emissions.

    One of the primary drivers behind the shift towards renewable methanol is its potential to significantly reduce greenhouse gas emissions. By utilizing carbon-neutral or even carbon-negative feedstocks, renewable methanol production processes can help mitigate the environmental impact associated with traditional methanol production. This aligns with India's commitment to reducing its carbon footprint and meeting its climate change goals outlined in international agreements such as the Paris Agreement.

    Renewable methanol offers greater energy security and independence by diversifying the country's energy sources. As India aims to reduce its reliance on imported fossil fuels and promote domestic energy production, renewable methanol presents a viable alternative. Its production can leverage India's abundant biomass resources, agricultural residues, and organic waste streams, contributing to rural development and economic growth in rural areas.

    Another key advantage of renewable methanol is its versatility and compatibility with existing infrastructure and applications. Renewable methanol can be used as a clean-burning fuel in transportation, power generation, and industrial processes, offering a seamless transition from conventional methanol. Additionally, renewable methanol can serve as a sustainable feedstock to produce chemicals, plastics, and other value-added products, supporting the growth of India's manufacturing sector while reducing its environmental footprint.

    To capitalize on the opportunities presented by renewable methanol, industry stakeholders are investing in research and development, pilot projects, and commercial-scale production facilities. Government support in the form of incentives, subsidies, and policy frameworks is also crucial in driving the adoption of renewable methanol technologies and fostering a conducive business environment. The shift towards renewable methanol represents a significant trend that is expected to drive the growth of the India Methanol Market in the coming years. By embracing sustainable production practices and leveraging renewable feedstocks, the industry can contribute to India's energy security, environmental sustainability, and economic development goals.

    Segmental Insights

    End Use Insights

    Based on the end use, the Formaldehyde segment emerged as the dominant player in the Indian market for Methanol in 2024. The Formaldehyde segment stood out as the leading player in the Indian Methanol market, dominating in terms of end-use applications. Formaldehyde, a vital chemical compound derived from methanol, serves various industrial purposes, contributing significantly to its prominence in the market. Its versatility makes it a key component in the production of numerous products, including adhesives, resins, plastics, and textiles.

    The dominance of the Formaldehyde segment underscores the widespread utilization of methanol as a feedstock in industries requiring Formaldehyde-based products. Industries such as construction, automotive, textiles, and healthcare heavily rely on Formaldehyde for manufacturing processes, further solidifying its position as the primary end-use application for methanol in India.

    The Formaldehyde segment's robust growth reflects the essential role of methanol in sustaining the operations of diverse industries and meeting the demand for Formaldehyde-based products. As India's industrial landscape continues to evolve, driven by economic growth and technological advancements, the Formaldehyde segment is poised to maintain its dominance in the Indian Methanol market.

    Application Insights

    Based on the Distribution Channel, the Direct Sales segment has notably risen to prominence as the dominant force in the Indian market. Direct sales entail a straightforward approach where producers sell their products directly to consumers, bypassing intermediaries such as wholesalers or retailers. This method offers several advantages, including greater control over pricing, direct interaction with customers, and the ability to tailor offerings to specific consumer needs.

    The prominence of the Direct Sales segment reflects a shift in consumer preferences towards more personalized and efficient purchasing experiences. With advancements in technology and digital platforms, companies can now engage with consumers directly through online channels, mobile apps, and social media platforms, further enhancing the appeal of direct sales.

    Furthermore, the Direct Sales segment enables companies to establish stronger brand relationships and loyalty among customers, fostering long-term sustainability and growth. By cutting out intermediaries, producers can also optimize their distribution costs and maximize profit margins.

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    Regional Insights

    Based on the region, the Western region has asserted dominance in the Indian Methanol market, standing out as a pivotal player in the industry's landscape. This region encompasses states such as Gujarat, Maharashtra, and Rajasthan, which boast robust industrial infrastructures and strategic advantages conducive to Methanol production, distribution, and consumption.

    Gujarat stands as a key hub for Methanol-related activities, hosting numerous manufacturing facilities and industrial zones that contribute significantly to the market's growth. Its well-established infrastructure and favorable business environment have attracted substantial investments in Methanol production and allied industries.

    Maharashtra and Rajasthan also play significant roles, with their industrial prowess and supportive policies driving Methanol market expansion in the Western region. These states offer favorable conditions for Methanol-related ventures, including access to raw materials, skilled labor, and transportation networks.

    Moreover, the Western region's proximity to major ports facilitates seamless import and export operations, enhancing market accessibility and competitiveness. This geographical advantage further strengthens the region's position as a dominant force in the Indian Methanol market..

    Recent Development

    • Assam Petrochemicals unveiled Asia's inaugural canister-based methanol cooking fuel initiative on October 5th, 2018. The initiative aims to reduce crude oil imports while offering an affordable, eco-friendly cooking alternative. Methanol stoves offer homeowners energy savings of up to 20%. Following the successful pilot, the methanol cooking program expanded to one million homes across Uttar Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Goa, Karnataka, Jharkhand, and Manipur.
    • Plans include constructing five high ash coal-based methanol plants, five DME plants, and a 20 MMT/year natural gas-based methanol facility in a joint venture with Israel. Cochin Shipyard Limited is building three boats and seven cargo ships for the Inland Waterways Authority of India, to operate on methanol as a marine fuel.
    • Thermax Ltd developed a 5 KW methanol-based reformer on a Direct Methanol Fuel Cell (DMFC) to potentially replace DG sets in mobile towers. Kirloskar Oil Engines Ltd. converted a 5 KW generator set to run solely on methanol for direct electricity generation, with plans to scale up to 150–300 KVA/KW capacity generators in collaboration with Israeli company Dor Chemicals.
    • BHEL (Hyderabad and Trichy), Thermax, and IIT Delhi are developing indigenous coal-to-methanol technology. BHEL Hyderabad and Trichy are working on 1 TPD and 40 TPD demonstration plants, respectively, while Thermax and IIT Delhi are developing a TPD demonstration plant.
    • In 2022, Indian Oil Corp (IOC) launched M15 petrol—a 15 percent methanol blend with petrol—on a pilot basis in Assam's Tinsukia district. The choice of Tinsukia for the pilot rollout was strategic, as Assam Petrochemical Ltd. produces methanol near the Digboi plant, ensuring ready availability.


    Key Market Players

    • Gujarat Narmada Valley Fertilizers and Chemicals Limited
    • Deepak Fertilizers and Petrochemical Corporation
    • Rashtriya Chemicals and Fertilizers
    • Assam Petrochemicals Limited
    • Bharat Heavy Electricals Limited

    By End-Use

    By Distribution Channel

    By Region

    • Formaldehyde
    • MTO/MTP
    • MTBE
    • Acetic Acid
    • Gasoline Blending
    • Others
    • Direct Sales
    • Indirect Sales
    • West India
    • North India
    • South India
    • East India



    Report Scope:

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

    • India Methanol Market, By End-Use:

    o   Formaldehyde

    o   MTO/MTP

    o   MTBE

    o   Acetic Acid

    o   Gasoline Blending

    o   Others

    • India Methanol Market, By Distribution Channel:

    o   Direct Sales

    o   Indirect Sales

    • India Methanol Market, By Region:

    o   North

    o   South

    o   West

    o   East

    Competitive Landscape

    Company Profiles: Detailed analysis of the major companies present in the India Methanol Market.

    Available Customizations:

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

    Company Information

    • Detailed analysis and profiling of additional market players (up to five).

    India Methanol Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]  

    Table of content

    1.    Product Overview

    1.1.  Market Definition

    1.2.  Scope of the Market

    1.2.1.    Markets Covered

    1.2.2.    Years Considered for Study

    1.2.3.    Key Market Segmentations

    2.    Research Methodology

    2.1.  Objective of the Study

    2.2.  Baseline Methodology

    2.3.  Key Industry Partners

    2.4.  Major Association and Secondary Sources

    2.5.  Forecasting Methodology

    2.6.  Data Triangulation & Validation

    2.7.  Assumptions and Limitations

    3.    Executive Summary

    3.1.  Overview of the Market

    3.2.  Overview of Key Market Segmentations

    3.3.  Overview of Key Market Players

    3.4.  Overview of Key Regions/Countries

    3.5.  Overview of Market Drivers, Challenges, and Trends

    4.    Voice of Customers

    5.    Impact of COVID-19 on India Methanol Market

    6.    India Methanol Market Outlook

    6.1.  Market Size & Forecast

    6.1.1.    By Value & Volume

    6.2.  Market Share & Forecast

    6.2.1.    By End Use (Formaldehyde, MTO/MTP, MTBE, Acetic Acid, Gasoline Blending, Others)

    6.2.2.    By Distribution Channel (Direct Sales, Indirect Sales)

    6.2.3.    By Region (North, South, East, West)

    6.2.4.    By Company (2024)

    6.3.  Product Market Map

    7.    North India Methanol Market Outlook

    7.1.  Market Size & Forecast       

    7.1.1.    By Value

    7.2.  Market Share & Forecast

    7.2.1.    By End Use

    7.2.2.    By Distribution Channel

    8.    South India Methanol Market Outlook

    8.1.  Market Size & Forecast       

    8.1.1.    By Value

    8.2.  Market Share & Forecast

    8.2.1.    By End Use

    8.2.2.    By Distribution Channel

    9.    East India Methanol Market Outlook

    9.1.  Market Size & Forecast       

    9.1.1.    By Value

    9.2.  Market Share & Forecast

    9.2.1.    By End Use

    9.2.2.    By Distribution Channel

    10. West India Methanol Market Outlook

    10.1.             Market Size & Forecast        

    10.1.1. By Value

    10.2.             Market Share & Forecast

    10.2.1. By End Use

    10.2.2. By Distribution Channel

    11. Market Dynamics

    11.1.             Drivers

    11.2.             Challenges

    12. Market Trends & Developments

    12.1.             Merger & Acquisition

    12.2.             Product Development

    12.3.             Recent Developments

    13. Porters Five Forces Analysis

    13.1.             Competition in the Industry

    13.2.             Potential of New Entrants

    13.3.             Power of Suppliers

    13.4.             Power of Customers

    13.5.             Threat of Substitute Products

    14. Pricing Analysis

    15. Policy & Regulatory Framework

    16. India Economic Profile

    17. Competitive Landscape

    17.1.             Gujarat Narmada Valley Fertilizers and Chemicals Limited

    17.1.1. Business Overview

    17.1.2. Company Snapshot

    17.1.3. Products & Services

    17.1.4. Financials (As Reported)

    17.1.5. Recent Developments

    17.2.       Deepak Fertilizers and Petrochemical Corporation

    17.3.       Rashtriya Chemicals and Fertilizers

    17.4.       Assam Petrochemicals Limited

    17.5.       Bharat Heavy Electricals Limited

    18. Strategic Recommendations

    19. About us and Disclaimer

    Figures and Tables

    Frequently asked questions


    Growing demand from pharmaceutical industry and power generation as well as chemical sector is driving the growth of India methanol market.


    The market size, By Volume of the India Methanol Market was estimated to be 330.08 thousand Metric Tonnes in 2024.


    The Formaldehyde segment stood out as the leading player in the Indian Methanol market, dominating in terms of end-use applications. Formaldehyde, a vital chemical compound derived from methanol, serves various industrial purposes, contributing significantly to its prominence in the market. Its versatility makes it a key component in the production of numerous products, including adhesives, resins, plastics, and textiles.


    Gujarat Narmada Valley Fertilizers and Chemicals Limited, Deepak Fertilizers and Petrochemical Corporation, Rashtriya Chemicals and Fertilizers, Assam Petrochemicals Limited and Bharat Heavy Electricals Limited are some of the key players of India methanol market.


    Sakshi Bajaal

    Business Consultant
    Press Release

    India Methanol Market to be Dominated by Gasoline Blending Segment through 2030

    Apr, 2024

    Rising Demand from various end-user industries is expected to drive the growth of India methanol market in the forecast period 2026-2030.