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Indian Chemicals and Electronics Industry Analysis

October, 2014

The Indian chemical industry stands as the third largest producer in Asia and 12th in world, in terms of volume. This industry could grow at 14 per cent per annum to reach a size of US$ 350 billion by 2021. India accounts for approximately 7 per cent of the world production of dyestuff and dye intermediates and is currently the world's third largest consumer of polymers and fourth largest producer of agrochemicals.

The market size of the chemical industry is expected to grow to US$ 350 billion by 2021. With 72 per cent of the total production share, alkali chemicals form the largest segment in the Indian chemical industry. Total exports of chemicals grew at a compound annual growth rate (CAGR) of 16.2 per cent to reach US$ 15.5 billion in FY13.

The Government of India has announced a number of measures to improve competitiveness in this sector, which includes abolishing of industrial licensing for most sub-sectors and granting 100 per cent approval to FDI.

The chemical industry has scope for growth in the specialty chemicals market which has expanded at a CAGR of about 12 per cent over FY07-11. The figure is expected to rise to 13 per cent over the next five years to reach US$ 45 billion by FY17. By 2017, the construction chemicals sector is also set to touch US$ 1,040 million. The polymer chemicals sector is anticipated to grow at a higher rate due to growth in plastic demand resulting from increased usage in packaging, construction and automotive sectors.

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