Market Insights

Market Insights

India’s Hydrogen Peroxide Market Remains in Surplus Despite Changes in Trade Flows Dynamics

Hydrogen peroxide is used in a wide range of applications, including pulp and paper bleaching, textile, cleaning, disinfection, electronics, and food segments. India is one of the largest producers of hydrogen peroxide in Asia. Growth in production in the country has been supported by rapidly increasing demand in the paper and pulp industry, as well as in the textile segment, which takes up a large part of the Indian economy.

However, the significant growth in hydrogen peroxide demand in the country has also made the Indian market more attractive for imports. There have been some developments in trade flows in the last decade, which led to substantial changes in the supply dynamics in the country and helped to shape the hydrogen peroxide market in India as we know it today.

As hydrogen peroxide demand in India took off during the first half of last decade, the country became more attractive for importers. This uptrend accelerated in the mid-2010s, causing a surplus of hydrogen peroxide in India, until it reached a level where domestic producers had to cut their production rates and reduced their domestic supply market share.

As a result, two local producers filed an application requesting an investigation around these imports, and in 2017, the Directorate General of Anti-Dumping (DGAD) imposed an anti-dumping duty for hydrogen peroxide in India, from six countries: Bangladesh, Taiwan, South Korea, Indonesia, Pakistan and Thailand, effective for 5 years.

The antidumping duty led to a sharp reduction in imports from some countries, but the impact on imports from other countries was more limited and five years after implementation, in June 2022, the Central Government of India decided to lift the duty, as the government determined that the duty was no longer necessary to protect the domestic market.

Once the anti-dumping duty was withdrawn, hydrogen peroxide imports into India rebounded again.  However, this increase has not been widespread and is mostly confined to imports from Bangladesh, which now accounts for most of the imports into India. Bangladesh imports into India surged in the second half of 2022, and this trend continued into this year. For other countries like Thailand and Indonesia, although hydrogen peroxide imports to India resumed after the lifting of the anti-dumping duty, it was at a significantly lower volume compared to that reported before the antidumping implementation, as these countries found other alternative markets to export their product.

While competition from imports resumed, the supply pressure was relieved by new export opportunities out of India. Exports to Russia, West Africa and Turkey have surged since 2022. Russia has become the main destination for exports of hydrogen peroxide out of India, this is due to the impact of the curtailment in exports from Europe to this country since the start of the conflict in Ukraine, which forced Russian buyers to source for import volumes in other regions.

However, the increase in export opportunities to other regions has not fully altered the supply/demand balance in India and since the last quarter of 2022, India has been facing a surplus for hydrogen peroxide. Some market players believe that this is due to the significant investment in hydrogen peroxide capacities done over the last few years, partly driven by some chlor-alkali producers trying to find an outlet for their hydrogen. However, demand did not increase at the same pace and thus led to an excess of capacity in the market, exacerbated by the increase in imports observed in the last year. As demand in the major textile sector declined since the second half of 2022, due to the impact of high inflation rates globally on consumer spending, the surplus of hydrogen peroxide continued to worsen, and inventories piled up.

On the other hand, there are also companies that have announced pulp and paper mills expansions in the upcoming years, which indicate that there are still producers who are confident that the market’s future demand in this sector will be increasing and are working towards increasing their production capacity to meet that additional demand.

In conclusion, the removal of the anti-dumping duty for hydrogen peroxide in India prompted an increase in imports, which coupled with weak demand led to a surplus situation in India. Although the hike in exports to other regions has helped to offset some of this excess, domestic demand remains weak and given the current economic situation, no significant improvement is expected through the rest of the year, with the market expected to remain on the long side of the balance. This is unlikely to change in 2024, as two new capacities are expected to come on-stream in the country. In the mid-to-long term, Chemical Market Analytics by OPIS expects demand in textile, and some other applications, will recover and support overall consumption for hydrogen peroxide, while developments in trade flows will continue to play an important role in the overall supply and demand balance in the country.



Kelly Low
Senior Research Analyst


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