Lubrizol Sees India's Fuel Diversity as Its Biggest Opportunity

Every morning, Lubrizol runs a war room. Supply updates, freight movement, inventory levels, cost escalations — the meetings are daily, sometimes urgent. The West Asia conflict has made that necessary. "You have big plans," says Abhishek Shrivastava, Managing Director for India, Middle East and Africa at the specialty chemical company, "and then suddenly, you are worried about how to run a manufacturing plant based on limited feedstocks and energy."

That anxiety, however, sits alongside a conviction: that India is becoming one of the most important markets in Lubrizol's global portfolio, and that the country's unusual automotive structure is the reason why.

"India is about fuel diversity. We are about CNG, ethanol, hydrogen, crude and so on. Everything is linked to feedstock," Shrivastava says. No other major auto market is navigating all of these simultaneously, which means the chemistry required to service it is unlike anything developed for Europe or the US.

The ethanol problem

India's move to 20 percent ethanol blending in petrol — achieved ahead of its original 2030 target — is one of the clearest examples of how policy is rewriting the technical requirements of the auto industry. Higher blends, including E25, E27 and E30, are already being discussed, while OEMs have begun work on flex-fuel vehicles.

For additive makers, each step up the blending ladder creates new problems to solve. Ethanol absorbs moisture, burns differently from petrol and can damage rubber, plastic and metal components if the system is not designed for it. Fuel additives can help manage moisture and corrosion; engine oil additives can protect seals, gaskets and internal components.

What complicates matters further is that India's auto market is dominated by small-capacity engines — across motorcycles, scooters, three-wheelers and entry-level passenger vehicles. These are more sensitive to ethanol-related stress than the larger engines that dominate developed markets. "You cannot take a car built in 2010 and say, put ethanol in it," Shrivastava says. "The engine will actually not survive it in a couple of years."

The same logic extends to two-wheelers, where the gap between Indian and Western markets is structural, not just dimensional. "You go to Europe or the US, and a small bike is 600cc or 650cc. Here, a big bike is 350cc. So, we have very specific formulations for these engines." Lubrizol is building a centre of excellence in India focused on engine oils, driveline fluids and formulations suited for Indian two-wheelers.

The trading model is dead

For decades, multinational specialty chemical companies operated in India primarily as importers — developing products elsewhere and selling them here. That model is no longer viable.

"Most MNCs have treated India as a trading market — let's get our products to India. You make it outside, get it in dollars and sell it in rupees. That was the model," Shrivastava says. "You cannot bring a product from the West and say, I will capture the market. These are over-designed products."

India's Production Linked Incentive scheme for automobiles and auto components is accelerating this shift by pushing the supply chain towards higher domestic value addition. Lubrizol's response is to develop in India for India first, and then export those products to other markets. "First, it is local for local. Then it becomes local for global."

Where the near-term money is

Even as electrification advances in passenger vehicles and two-wheelers, commercial vehicles remain the more immediate growth anchor for specialty chemical suppliers. India's infrastructure spending — roads, logistics, construction — is driving sustained demand for heavy-duty engines and the fluids, greases, coolants and lubricants that service them.

"Heavy-duty commercial vehicles, we see a lot of growth because as an economy grows, you are moving a lot of earth and transporting a lot of goods," Shrivastava says. Government capex on infrastructure is expected to continue, sustaining demand across cranes, heavy-duty transportation and freight movement.

The larger bet

Lubrizol currently derives a little over 10 percent of its global revenue — estimated at between $6 billion and $8 billion annually — from India. The target is to more than double that share to over 20 percent in the next six to eight years.

That ambition requires building a complete local ecosystem. "We cannot win in India unless we have a full business in India. That means manufacturing here, technology here and ecosystem partnerships here," Shrivastava says.

For global specialty chemical companies, the calculus is becoming clear: India is not a market you can service from the outside. It needs to be built from within — in chemistry, in manufacturing, and increasingly, in risk management, one daily war room at a time.