Three years ago, the competitive battle in India’s decorative paints market was largely fought on familiar ground: dealer networks, distribution reach, brand visibility and the ability to enter new markets. That equation is changing as the industry attracts fresh capital and large-scale manufacturing capacity.
The next battle may be taking place much further upstream.
India’s decorative coatings market was estimated at around USD 12.5 billion in 2025 and is projected to cross USD 30 billion by 2034, according to Prismane Consulting estimates. Organised players accounted for about 76% of the market in 2025, reflecting the shift towards branded products, wider distribution and higher-performance coatings.
As the market grows, manufacturers are under increasing pressure to balance product performance with production costs. Raw materials, particularly imported chemicals and intermediates, are becoming a more important part of that equation.
This is where Vinyl Acetate Ethylene, or VAE, and Vinyl Acetate Monomer, or VAM, are emerging as strategic inputs.
Asian Paints’ investment at Dahej marks a significant move in that direction. The company has started commercial production at its 150 kilotons per year VAE facility and is developing another 100 kilotons per year of VAM capacity. The project takes the company deeper into a value chain that has historically relied heavily on imports.
A bigger market, a tougher cost equation
Competition in paints has intensified with the arrival and expansion of large players. Grasim’s Birla Opus has completed its first phase with six greenfield plants and installed capacity of 1,332 million litres per annum. Its manufacturing network also includes backward integration into emulsions and resins.
JSW Paints has taken a different route. It acquired a 60.76% stake in Akzo Nobel India in December 2025, with its holding rising to 61.2% after the open offer. The transaction brought brands such as Dulux, International and Sikkens into its portfolio and strengthened its presence in decorative and industrial coatings.
Berger continues to expand its manufacturing and distribution network, while Indigo Paints is pursuing its own mix of product differentiation, manufacturing and market development.
With more capacity competing for market share, the economics of every litre produced matter more. That makes control over critical inputs an increasingly relevant competitive lever.
The import exposure underneath the paint
Paint manufacturers remain exposed to international prices, freight costs, currency movements and supply disruptions because several important chemical inputs are imported.
The scale of the VAE and VAM dependence highlights the issue. India imported about 61 KT of VAE in 2025, while VAM imports stood at approximately 221 KT. Nearly 98% of VAM imports came from Saudi Arabia and Singapore. VAM is particularly important because it is the monomer used to produce VAE.
That means domestic VAE production addresses only part of the exposure. The larger opportunity lies further upstream.
Asian Paints’ VAE plant is primarily intended for captive requirements, so its significance is not simply the additional volume entering the merchant market. Domestic production gives the company greater control over supply planning, inventory and product development while reducing exposure to imported polymer, freight and currency movements.
The planned VAM capacity takes that strategy a step further.
From VAE to VAM
VAM production requires acetic acid and ethylene. Bringing VAM production closer to the domestic market could therefore have implications beyond paints, particularly for India’s acetic acid industry.
GNFC is currently the country’s sole domestic acetic acid producer. It has also signed a memorandum of understanding with INEOS Acetyls to evaluate a 600 KT per year acetic acid plant at Bharuch, targeted for 2028. GNFC has indicated that India imports about 85% of its annual acetic acid requirement.
The developments are not directly tied to the Asian Paints project, but they point towards a wider opportunity to strengthen the domestic chemical chain.
The potential chain is straightforward: acetic acid and ethylene feed VAM production, VAM is used to manufacture VAE, and VAE serves industries ranging from paints and coatings to adhesives, construction chemicals, textiles and nonwovens.
Integration becomes another competitive tool
Vertical integration will not be practical for every paint manufacturer. The decision depends on consumption volumes, capital requirements, technical expertise and the strategic importance of a particular input.
Asian Paints has the scale to pursue captive VAE production and move further into VAM. Birla Opus has taken another route, entering the market with large manufacturing capacity and integrated emulsion and resin production. JSW Paints has expanded through acquisition, while Berger and Indigo Paints continue to rely on their respective manufacturing, distribution and product strategies.
The broader shift is that raw-material control is becoming part of the competitive playbook.
For companies that cannot justify full integration, alternatives could include long-term sourcing agreements, formulation optimisation and manufacturing efficiencies.
The opportunity goes beyond import substitution
Domestic VAE production could initially replace some imports, but its impact may extend further. VAE is used across several industries, including adhesives, construction chemicals, textiles and nonwovens.
A stronger domestic supply base could reduce lead times and inventory requirements while lowering exposure to international logistics and currency movements. It could also make VAE-based formulations more accessible to downstream manufacturers.
Imports are unlikely to disappear altogether. Specialised grades and supply gaps will continue to support international sourcing. But the balance between domestic production and imports could change as local capacity develops.
For India’s paints industry, the implication is clear. Competition is no longer confined to who can sell more paint or build the widest distribution network.
The contest is moving into the chemical value chain beneath the paint.
Asian Paints’ VAE facility is the first major step in that direction, while the proposed VAM capacity takes integration further. If domestic VAM production develops alongside greater acetic acid availability, India could gradually build a more integrated ecosystem spanning acetic acid, VAM, VAE and downstream coatings.
That would make the Dahej project more than a capacity addition. It could signal a shift in how India’s paint industry manages cost, supply security and margins.
