India’s bitumen demand to rise by 14pc in FY2024-25

India's bitumen consumption is expected to increase by about 14pc on the year to 10mn t over April 2024-March 2025, propelled by pent-up demand from pending national highway projects and state government-linked road projects.

"We have the largest road network in the world. 90pc of roads are using bituminous layers. Bitumen consumption in [the financial year] 2023-24 was 88 lakh tonnes (8.8mn t). In FY2024-25, it is expected to be 100 lakh tonnes (10mn t)," the country's transport minister Nitin Gadkari recently said in the Rajya Sabha, the upper house of parliament.

But the road ministry has provisionally set a NH construction target of 10,421km for the ongoing financial year ending March 2025, according to a statement from Gadkari in the Lok Sabha, the lower house of parliament. This is down from 13,814km targeted for the previous financial year.

"There may be a bit of a dent [in consumption] because of this target but it will be compensated by state [government-linked] road works and older projects, which are still ongoing, so the target does not really mean anything now. Funding is a perennial issue, but contractors are able to mitigate it and get the work done," a market participant told Argus.

Many importers and dealers told Argus that state government-linked maintenance and other road projects, including those being delayed because of funding issues, would support consumption this year.

Consumption from state government-linked projects was lacklustre in the last three years, but bitumen demand and imports could rise as the construction of projects accelerates, a west coast India-based importer said.

"Demand is expected from states like Maharashtra, Tamil Nadu, and Andhra Pradesh because of reasons like upcoming state elections," another west coast India-based importer said.

India's bitumen consumption in the calendar year 2023 rose by 10pc on the year to a record high of 8.87mn t on the back of accelerated construction of national highway projects.

Pending NH projects

India had set a target of building 34,800km of roads and highways by 2022 under the first phase of its flagship Bharatmala Pariyojana program, but the progress was delayed because of Covid-19 lockdowns. Of this total, about 26,400km of road construction was awarded and about 17,400km was constructed as of March 2024, according to the latest data from the transport ministry. The remaining construction is estimated to be completed by the financial year 2027-28.

About 1,375 national highway projects are currently under construction, with the ministry expecting most of those to be completed during the current and the next financial year. The ministry also had a balance of about 20,000km of national highways for construction under ongoing or awarded projects at the beginning of the current financial year.

By Sathya Narayanan and Chloe Choo