Indian Oil Corp will invest 329.46 billion rupees ($4.46 billion) to raise the capacity of its Panipat refinery by two-thirds to 500,000 barrels per day (bpd) by September 2024.

India, the world's third-largest oil importer and buyer, plans to increase its 5 million bpd refining capacity by 60 per cent to meet growing local demand as Prime Minister Narendra Modi seeks to improve the manufacturing sector.

In addition to expanding capacity, IOC will install catalytic dewaxing and polypropylene units at its Panipat refinery in northern Punjab, it said in a statement.

In 2018, IOC announced the expansion of capacity of the 300,000 bpd Panipat refinery costing 231 billion rupees. At that time, it had not revealed plans to set up the other two units.

IOC said that the expansion of the refinery would increase the production of petrochemicals and value-added specialty products in order to boost their margins and help 'de-risk the company's traditional fuel market.'

In order to meet India's rising energy demand, oil minister Dharmendra Pradhan is seeking 175 acres of land in the eastern West Bengal state to expand the IOC's 160,000-bpd Haldia refinery, IOC said.

IOC, along with its subsidiary Chennai Petroleum Corp Ltd, has a combined installed refining capacity of 1.6 million bpd.