Industrial Front | September 2025
India’s paints and coatings sector, valued at USD 10.46 billion in 2025 and projected to touch USD 16.38 billion by 2030 at a CAGR of nearly 9.4%, is drawing interest not only from established manufacturers but also from traders looking to step into production. With the industry expanding, the question being asked across trading circles is: when is the right time to make the move?
Market Momentum
Decorative paints dominate the Indian market, with water-borne coatings accounting for 45.9% of revenue share in 2024 and expected to grow at 9.9% CAGR over the coming years. Acrylic resins, widely used in wall finishes and emulsions, held 36.7% share last year. (Mordor Intelligence)
Industrial coatings, covering automotive and protective applications, form a smaller segment worth USD 3.8–6.0 billion, with growth projected at 3–5% CAGR, slower than decorative paints. (IMARC Group)
These figures suggest opportunity, especially in mid-tier cities where demand for affordable decorative paints often outpaces supply. Traders, with direct insight into local shortages, see potential in setting up small manufacturing units to plug these gaps.
Margins Under Pressure
Trading typically yields 5–10% margins. Manufacturing, though capital intensive, can deliver 20–30% profit margins when raw material sourcing and operations are tightly controlled. Analysts note that traders facing pressure from shrinking trading margins are increasingly exploring private manufacturing as a path to higher returns.
Cost & Compliance
Setting up a paint plant is not without challenges. A small to mid-scale facility may require ₹5 crore to ₹20 crore, depending on automation and capacity. Beyond capital, manufacturers must secure environmental clearances, establish effluent treatment systems, and invest in testing labs to meet quality standards. Experts warn that those without compliance readiness risk costly delays.
Policy Incentives
Government support provides a cushion. Under the Micro & Small Enterprises Cluster Development Programme (MSE-CDP), the Government of India covers 60–70% of project costs for eligible clusters, particularly for infrastructure and common facility centres in the chemicals and coatings sector. Projects between ₹5 crore and ₹30 crore often qualify. (MSME Ministry)
Further, NITI Aayog has proposed export incentives, chemical production clusters, and improved port infrastructure to strengthen competitiveness. (Indian Express) These moves are designed to ease logistics and encourage investment in coatings manufacturing.
The Distribution Advantage
Experts agree the biggest strength traders possess is their existing dealer and contractor networks. “A manufacturing unit without a strong distribution chain risks struggling with sales. For traders, this bridge already exists,” said a coatings consultant.
Conclusion
The best time for a trader to step into manufacturing is when demand gaps, capital availability, policy incentives, and distribution strength align. While the opportunity is real, the transition demands both financial preparedness and regulatory compliance. Done right, it can transform traders into long-term industry players in a rapidly evolving market.