In India, new environmental legislation and Bharat [Stage] VI will lead to change in the overall automotive industry and the lubricants market, Andy Yoon, global technical manager of base oil business planning team at Seoul-based SK Lubricants, told attendees at the ICIS Indian Base Oils & Lubricants Conference.

India, one of the fastest growing lubricants market in the world, plans to jump from the current Bharat Stage IV automobile emissions standard directly to BS VI in April 2020, skipping the BS V phase altogether in order to tackle the nations worsening air pollution. BS VI is equivalent to the European Unions Euro 6 standard and is expected to force engine design changes that require more advanced engine oils.

Yoon said BS VI will cause a shift to low-viscosity, synthetic automotive lubricants.

Synthetic lubricants demand in India is low, but there is potential for large-scale growth because the car ownership rate per 1,000 residents is below 200, significantly lower than countries like the United States, Japan and France, he noted.

Kline & Co. consultants estimates Indias synthetic lubricants demand at around 5 percent to 6 percent of its total annual finished lubricants demand of 1.8 million metric tons, excluding process oils. Semi-synthetic lubricants account for an addition 4 percent to 5 percent of total demand.

The market for synthetic lubricants is expected to register good growth rates in the consumer vehicle segment, said Shweta Ranshore, an analyst at U.S.-based Kline.

There is a great thrust for fuel efficiency and emission norms where lighter-viscosity oils play a significant role. Also, there is now a new demand for 0W oils, driven by OEM recommendations, she explained.

Yoon said the push to improve fuel economy is raising demand for 5W and 0W multi-grade passenger car engine oils that must be formulated with high quality base oils. This will lead to increased demand for Group III oils, he added.

In the heavy-duty diesel oil market, which is currently dominated by 15W-40 and heavier products, demand for Group II oils is also expected to rise going forward, Yoon stated.

During the first stage, factory-fill in India is expected to change from 15W and 10W to 5W and 0W around 2020, [and] then these low-[viscosity] synthetic lubricants will emerge into the service fill market, he predicted.

Synthetic lubricant usage is diversifying and expanding because they offer tremendous advantage in terms of oxidation stability, low-temperature properties and increased efficiency, Abhijit Sarkar, chief manager of technical services at state-run Hindustan Petroleum Corp. Ltd., said at the conference.

He noted that industrial oil applications in India increasingly use synthetic lubricants because they allow longer oil drain intervals, thereby reducing overall manpower costs.

The cost, however, remains high for synthetics that are being used in gear boxes, compressors, transformer oils and hydraulic applications, he noted.

According to Kline, synthetic lubricants are demanded in specialized applications, such as the mining and steel industries, where operating conditions put great stress on lubricants, or in wind turbines, where frequency of service is an issue.

HPCLs Sarkar said tax policy is also aiding the growth of synthetic lubricants. Taxes on synthetic lubricants have come down to 18 percent from 28 percent earlier, due to the countrys new Goods and Services Tax regime.

Sarkar stated that emergence of electric cars opens a new growth area for synthetic lubricants because their gear cases require lubes made with Group IV or Group V base stocks. However, these oils will not only need to pass the seal compatibility test, but would also have to be compatible with electric components, he added.