New Delhi: India’s paints and coatings industry, long seen as a bellwether of construction and consumer sentiment, is on track for strong medium-term expansion but is grappling with heightened competition and pressure on margins, industry data shows.
The sector, worth approximately $9.6 billion in 2024, is projected to grow at a compound annual growth rate (CAGR) of around 9.4% over the next five years, potentially reaching close to $16.5 billion by 2030, according to the latest Rubix Data Sciences Industry Insights report.
Margin squeeze in FY25: Despite robust long-term demand drivers — rapid urbanisation, rising disposable incomes, sustained infrastructure spending and India’s position as the world’s third-largest automobile market — FY25 exposed significant stress across the value chain. Major paint makers reported compressed margins and softer demand, particularly in urban areas, as consumers opted for cheaper value offerings. Aggressive discounting and higher dealer incentives further eroded profitability, signalling a shift from a historically stable, brand-led market to a more contested environment.
Competitive disruption & consolidation: Smaller and unorganised players — nearly 3,000 in number — faced acute strain due to rising compliance costs tied to environmental regulations and limited capabilities in R&D and distribution, making growth increasingly elusive. Larger incumbents also saw their turf tested by new entrants and industry consolidation. New brands like Grasim Industries’ Birla Opus, JSW Paints and Pidilite’s Haisha Paints have shaken up dealer networks and intensified pricing pressures. Strategic deals such as JSW Paints’ acquisition of Akzo Nobel India and Astral’s purchase of Gem Paints have reshaped competitive dynamics.
Trade imbalance & product shift: The paints sector remains a net importer, particularly of advanced industrial coatings and critical raw materials like titanium dioxide and specialised resins, with imports far exceeding exports in early FY26. While solvent-based products still dominate trade flows, there is a gradual pivot toward eco-friendly, low-VOC formulations as regulatory and consumer preferences evolve.
Outlook: Though FY25 highlighted near-term pressures, fundamentals remain solid. Government housing programmes such as the Pradhan Mantri Awas Yojana – Urban and Gramin are expected to sustain decorative paint demand, while innovation in high-performance and environmentally compliant coatings could redefine competitive advantage. Industry participants that invest in scale, technology, distribution and compliance readiness are likely to outperform as the market expands toward its $16.5 billion potential.
Market implications: The evolving landscape poses challenges for margins and profitability but also opens opportunities for consolidation, premiumisation and product diversification, with investors and executives closely watching how legacy players and new entrants navigate the next gro wth chapter.