IndianOil will add 500,000 tonnes per annum (TPA) of polypropylene capacity at its Koyali refinery in Gujarat, with the unit expected to start by the end of fiscal year 2026-27. The polypropylene expansion was reported on October 1, 2026 by trade outlets including Plastemart and Hydrocarbon Processing, and it adds a sizeable block of domestic supply for India’s plastics processors.
The polypropylene unit forms part of a wider expansion of the Koyali refinery’s crude processing capacity from 13.7 million tonnes to 18 million tonnes a year, according to the reports. Hydrocarbon Processing said the unit will use propylene from IndianOil’s 2.75-million-tpy INDMAX unit, a technology designed to maximise propylene output from refinery feedstock.
How Much Polypropylene Will the Koyali Refinery Add?
The new capacity is 500,000 TPA, which is half a million tonnes of polypropylene a year. Commissioning is targeted for the end of FY2026-27, meaning by March 2027. Hydrocarbon Processing’s headline describes a 2027 start. The expansion also includes a 270,000-tpy lube oil base stock unit and specialty chemical production, according to the same report.
Why Does the Koyali PP Expansion Matter for Plastics Processors?
Polypropylene is used in packaging, automotive parts, consumer products and medical applications. More domestic supply supports import substitution and could strengthen competition among domestic PP producers, as Plastemart noted. Koyali’s location in Gujarat also places the output close to major petrochemical clusters and port infrastructure, which can help processors in western India.
What Do Current Polypropylene Prices Show?
Plastemart’s price update for October 1, 2026 showed domestic PP prices rising by INR 1,000 per tonne across most sectors, with the H110EG grade up INR 3,000 per tonne, while PVC grades were rolled over. Those figures show how closely processors watch supply, and they are separate from the Koyali project, which will not affect prices until the unit is running.
Market Reaction and Industry Response
We did not find analyst commentary, share price reaction or plastics trade body statements on this specific update at the time of writing. IndianOil said, according to Hydrocarbon Processing, that it expects India to keep importing polypropylene even after new domestic capacity arrives, because domestic demand is growing and per-capita plastics consumption remains relatively low.
What Happens Next?
The next milestones are mechanical completion and commissioning of the INDMAX-fed polypropylene unit before the end of FY2026-27. Plastics processors should watch for IndianOil’s announcements on grades and start-up timing, and for how the new supply affects domestic pricing relative to imports.
Frequently Asked Questions
How big is the new IndianOil polypropylene unit at Koyali?
The unit will add 500,000 tonnes per annum of polypropylene capacity at the Koyali refinery in Gujarat.
When will the Koyali polypropylene unit start?
IndianOil is targeting the end of fiscal year 2026-27, which means around March 2027.
Will India still import polypropylene after the expansion?
According to Hydrocarbon Processing, IndianOil expects imports to continue because domestic demand is growing and per-capita plastics consumption remains relatively low.
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