Cash and Chemicals - Impact of demonetisation on India's petrochemical industry

Report summary

On November 8, Indian prime minister Narendra Modi shocked the financial system of the country when he announced the demonetisation of high denomination currency (INR 500 and INR 1000). This is a massive exercise where 86% of all the currency circulation lost its legal tender status almost instantaneously. While on a research trip in India as the demonetisation drive began, I witnessed the situation first hand on people in the streets, on banks, and on businesses. The objective of this insight is to walk you through the impact of demonetisation on India's petrochemical industry. We will also discuss our expectations in light of the cash crunch on this important economic sector in India and the ripple effects on international markets.