Solvents in the industrial sector are invisible to consumers, but they are essential for modern industry. Solvents are used in a wide range of products, from paints and coatings to electronics and pharmaceuticals. They enable reactions, dissolve substances and provide efficient carriers. Solvents are essential to the production of many products. They enable reactions, dissolve substances, and provide efficient carriers.
The solvent industry faces a major crossroads as we approach 2025. One hand, petrochemical-based traditional solvents continue dominating the market. Green solvents are also being introduced by sustainability pressures, stricter regulations and consumer demands for eco-friendly products. This changing landscape offers both opportunities and challenges to entrepreneurs, especially in niche segments with high value where innovation can provide competitive advantages.
Market Outlook: A Growing, but Transforming Industry
The industrial solvents market is growing steadily at a CAGR of between 3.8 and 4%. It was worth USD 56 billion globally in 2023, but it’s expected to grow to USD 73 billion USD by 2030. The sector in India is more dynamic, driven by the growth of pharmaceuticals, paints and coatings, and agrochemicals – industries that consume the majority of solvents.
The market can be divided into two broad categories:
- Conventional petrochemical-derived solvents such as acetone, toluene, and isopropanol.
- Bio-based solvents or green solvents are emerging, and they are derived from renewable sources.
The green solvents market will grow at nearly twice the rate as conventional solvents, with a CAGR of 7% (Chemical Weekly August 2025).
Global market forecast for Industrial Solvents
| Year | Market Size (USD Billions) | CAGR (%) |
| 2023 | 56 | – |
| 2025 | 61 | 3.8 |
| 2030 | 73 | 4.0 |
Demand Drivers in Key Industries
Diverse industries are driving the demand for industrial solvents, and each has its own unique growth driver. Solvents are vital for the pharmaceutical industry, as they are used in drug synthesis, purification and formulation. Solvent usage can be blamed for nearly a third the cost of pharmaceutical raw materials. India exports medicines to over 200 countries. The demand for pharmaceutical grade solvents like ethanol, dimethylformamide, and acetone continues to rise.
Solvents are used in the agrochemical sector as carriers, diluents and carriers for pesticides and herbicides. Solvents will be essential to India’s growth in agrochemicals, as the exports of this sector are expected to increase by 8-10% per year. Solvents can have a direct impact on the stability and efficacy of crop protection chemicals. This increases demand for high-purity and consistent formulations.
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Paints, coatings and adhesives are also a major market segment. Solvents are used to dissolve pigments, resins, improve spreadability and even out application. India’s construction and infrastructure sector is booming. As a result, demand for coatings, and therefore, solvents, has been steadily increasing.
Other emerging industries, such as energy storage and electronics, also have specialized requirements for solvents. Solvents can be used to clean semiconductors, make advanced composites and in lithium-ion batteries.
Green Solvents: The Future of Solvents
The transition to eco-friendly products is likely the biggest trend in this industry. While traditional solvents are effective, they often cause VOC emissions, contamination of groundwater, and other health risks. The regulatory frameworks in Europe, the US and, increasingly, Asia tighten restrictions on hazardous chemicals, increasing the need for safer alternatives.
Green solvents can be derived from renewable sources such as corn or sugarcane. They may also come from captured carbon dioxide. Bio-ethanol is used in personal care and pharmaceuticals, lactate esters are derived from corn starch and supercritical CO2 is becoming more popular in extraction processes of food and pharmaceuticals. Ionic liquids are another area of innovation. They are non-volatile and highly stable solvents which can be reused many times. This makes them eco-friendly as well as cost-effective.
Global green solvents are expected to double in value over the next decade. For entrepreneurs, entering the green solvent space offers the dual advantage of catering to regulatory shifts and aligning with sustainability-conscious buyers.
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Manufacturing Industrial Solvents – Process Insights
Industrial solvents are manufactured in two ways: petrochemically or biochemically. Petrochemical solvents can be produced by refining crude oils or natural gases into intermediates such as benzene toluene and xylene. These intermediates can be transformed by processes like catalytic reforming or oxidation into solvents such as acetone, isopropanol, and methanol.
Bio-based solutions are made from renewable feedstocks. Bio-ethanol, for example, can be produced by fermenting corn or sugarcane. Soy-based solutions are made through esterification. Green chemistry is often used to reduce waste and energy.
Purification is essential, regardless of the feedstock. Solvents for pharmaceutical or food grade require purity levels above 99.5%. This requires sophisticated distillation and filtration systems, as well as testing equipment. It is important for entrepreneurs to invest in quality assurance systems. They are the foundation of their credibility and market acceptance.
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Startups Have Many Opportunities in 2025 and Beyond
The solvent industry provides several opportunities for newcomers. The demand for bulk solvents is expected to continue, particularly in markets with rapid growth, such as India, where agrochemicals and pharmaceuticals are growing. The most lucrative opportunities are in niches that have high value and are specialized.
Pharmaceutical-grade solvents are one such niche, where the demand is high and quality standards strict. Startups who can consistently deliver high-purity, consistent solvents at competitive pricing can quickly establish themselves a reliable supplier. Green cleaning solvents are another promising field for industries such as electronics, textiles and automotive maintenance. Biodegradable alternatives have gained popularity as companies strive to reduce their carbon footprints.
Recycling and recovery represents yet another opportunity for entrepreneurs. Waste solvents are often generated by industries that use a lot of solvents, such as the pharmaceutical industry. The establishment of units that recover and purify waste solvents reduces the environmental impact, but also saves clients money.
The specialty segment is also ripe with innovation. Solvents are increasingly important in 3D printing, lithium-ion battery synthesis, and nanomaterial synthesis. Entrepreneurs that can develop solutions tailored to these needs can gain a foothold in the future industries.
Read More: Startup Ideas Based on India’s Growing Demand for Bulk Industrial Solvents
Key Global Players In Industrial solvents
The market for solvents is highly competitive with both multinational corporations and strong regional players leading the way.
| Company Name | Country | Focus Areas |
| BASF SE | Germany | Green chemistry for bulk and specialty solvents |
| Dow Chemical Company | USA | Bio-based alternatives to conventional solvents |
| ExxonMobil Chemical | USA | High-volume production of petrochemical solvents |
| LyondellBasell | Netherlands | Olefins, aromatics, acetone, MEK |
| Solvay SA | Belgium | Eco-friendly innovations and specialty solvents |
| Huntsman Corporation | USA | Amine-based solvents, coatings, adhesives |
| INEOS Group | UK | Solvents and intermediates in bulk |
| Jubilant Ingrevia | India | Pharma-grade solvents, pyridine derivatives |
| Aarti Industries | India | Agrochemical intermediates and solvents |
| Zhejiang Medicine Co. | China | Specialty chemical solvents and pharmaceutical solvents |
Challenges and Barriers
The solvent industry is not without its challenges. Environmental compliance is still a major obstacle. To meet global VOC emissions standards, significant investments are required in pollution control equipment and eco-friendly technologies. The price volatility of crude oils, which is the main feedstock for many petrochemical-based solvants, increases uncertainty for producers.
Another consideration is the capital intensity of production equipment. The initial investment required to set up distillation units, purification systems and testing labs is substantial. Startups may also find it hard to compete with established multinational corporations in the bulk commodity segment, where economies of scale are dominant.
These barriers aren’t insurmountable. Entrepreneurs can create profitable niches by focusing on innovation, specialization and sustainability rather than competing with giants of commodity markets.
India’s Strategic Advantage
India has a competitive advantage in the manufacture of solvents. India’s pharmaceutical exports and agrochemical manufacturing, as well as its booming construction sector, ensure a steady demand at home. India’s established petrochemical industry provides raw materials while government incentives and green initiatives encourage innovation.
India, with its skilled workforce, competitive cost structure, and proximity to major global trade routes is well positioned to not only become a major exporter but also a consumer of solvents both conventional and environmentally friendly. In India, entrepreneurs who establish solvent manufacturing units can take advantage of both the strong domestic demand and the global supply chain shifts away from China.
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Conclusion
Sustainability, specialization and global health and agriculture needs are shaping the future of industrial solvents. The traditional solvents will still have a place in the market, but real growth will come through bio-based and eco-friendly alternatives, as well as high-value, specialty solvents, which meet the needs advanced industries.
Entrepreneurs will find that the solvent industry is a unique combination of steady demand, and transformative opportunities. Startups can create solvent businesses that are profitable and sustainable by focusing on quality, compliance and innovation. They can contribute to industries such as healthcare, agriculture and energy.
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Top Business Opportunities for Entrepreneurs: FAQS
Q1. What is the market size and growth forecast for industrial solvents?
A. The industrial solvents market was worth over $56 billion in 2023. By 2030, it should reach $73 billion. It is growing slowly but steadily at around 4% each year.
Q2. What’s the main difference between conventional and green solvents?
A. Conventional solvents, like acetone and toluene, come from oil and gas. They work well but cause pollution. Green solvents, such as bio-ethanol, come from plants like corn or sugarcane. They are better for the environment. They are also growing faster in the market, about 7% each year.
Q3. Which industries are driving the demand for solvents?
A. Many industries need solvents. The pharmaceutical industry uses them to make and clean medicines. Agrochemicals need solvents for pesticides and fertilizers. Paints and adhesives use solvents to mix and apply their products. Electronics and battery makers also rely on solvents during production.
Q4. What are the most promising opportunities for a startup in the solvent industry?
A. Startups should focus on niche markets. For example, they can make high-purity solvents for the pharmaceutical industry. They can also create green solvents or recycle used ones. Another option is to design special solvents for 3D printing, nanotech, or batteries. This way, they can stand out and grow.