Paint Prices in India May Rise Up to 5% in April if Crude Oil Remains High: Report

India’s paint industry could see a fresh round of price increases in April if crude oil prices continue to stay at elevated levels. According to a recent report by Systematix Research, dealers across the country expect paint manufacturers to consider price hikes ranging from 2 percent to 5 percent in the coming month if crude prices remain high.

The report noted that companies have not yet announced any immediate price revisions. Instead, most paint manufacturers are likely to closely track crude oil movements and overall input costs through March before making a final decision. Raw materials used in paint production are closely linked to crude oil derivatives, which means fluctuations in global crude prices directly influence manufacturing costs.

Dealers believe that if crude oil prices remain at the current levels or move even higher for a longer period, companies may have little choice but to increase product prices to protect their margins. However, any initial price increase is expected to be moderate and implemented gradually due to strong competition in the sector.

According to the report, the first phase of price hikes could remain in the low single digits and may be staggered during the first quarter of FY27. Further increases may follow if crude oil prices continue to climb and remain elevated for an extended period.

The study also highlighted the impact of crude oil fluctuations on profitability. Historically, a 10 percent quarter on quarter increase in crude prices has resulted in roughly a 130 basis point decline in gross margins for paint companies. This means prolonged crude price pressure could significantly affect industry profitability.

Despite cost concerns, demand in the paint industry remains relatively stable. Dealers across several regions reported that overall demand is growing in mid single digits in value terms.

Interestingly, the economy segment is currently witnessing stronger traction compared to premium and luxury paint products. Sales of economy emulsions and distempers are growing faster in many markets as price sensitive consumers continue to drive demand.

Industry players are therefore expected to balance pricing decisions carefully to manage both cost pressures and market competitiveness in the months ahead.