Chemical Industry india

The government has started various initiatives such as mandating BIS-like certification for imported chemicals to prevent dumping of cheap and substandard chemicals into the country.

In April 2025, Union Minister of Finance Ms. Nirmala Sitharaman said India plans to raise manufacturing’s GDP share from 14% to 23% over the next two decades to boost jobs and economic growth.

• Under the Union Budget 2025-26 the government allocated Rs. 1,61,965 crore (US$ 18.7 billion) to the Ministry of Chemicals and Fertilizers.
• India is prioritizing 14 sunrise sectors such as semiconductors, renewable energy products, medical devices, batteries, and labor-intensive industries like leather and textiles to boost manufacturing's contribution to GDP.
• In February 2025, the government has implemented enhanced quality compliance requirements via Quality Control Orders (QCOs) for more than 150 products across various sectors, including household appliances and industrial materials. This initiative, overseen by the Bureau of Indian Standards (BIS), aims to enforce stricter safety and performance standards.
• The Union Budget 2025 launched the second Asset Monetization Plan targeting Rs. 10 lakh crore (US$ 113.60 billion) from FY25 to FY30. This plan includes public sector undertakings in the chemical industry like Gujarat Narmada Valley Fertilizers & Chemicals, Gujarat State Fertilizers and Chemicals, and Rashtriya Chemicals & Fertilizers. The initiative aims to attract private investments, fostering public-private partnerships to drive modernization, innovation, and competitiveness in the chemical sector.
• In 2024-25, significant emphasis was placed on skill development for the chemical sector workforce. Institutions like the Central Institute of Petrochemicals Engineering & Technology (CIPET) are offering specialized courses for professionals and technicians to enhance skills tailored to industry needs. This includes training on advanced technologies for modernization of the industry.
• The Rajasthan Refinery Limited (RRL) is expected to be commercially operational by March 31, 2026. The project has seen significant capital investment exceeding Rs. 52,877 crore (US$ 6.01 billion, generating direct employment for over 35,000 people. The government continues to focus on attracting investors to the PCPIR as part of its broader strategy to develop the petrochemical sector with modern infrastructure and sustainable growth.
• The government approved the five new Centers of Excellence for chemicals and petrochemicals in the month of October 2024. Further plans to establish three more centers are ongoing, supported by a dedicated digital portal connecting about 1,000 industries with 50 research institutions to enhance collaboration and innovation.
• PLI schemes have been introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crore (US$ 213.81 million).
• The Government of India is considering launching a production-linked incentive (PLI) scheme in the chemical sector to boost domestic manufacturing and exports.
• A 2034 vision for the chemicals and petrochemicals sector has been set up by the government to explore opportunities to improve domestic production, reduce imports and attract investments in the sector. The government plans to implement a production-link incentive system with 10-20% output incentives for the agrochemical sector; to create an end-to-end manufacturing ecosystem through the growth of clusters.
• 100% FDI is allowed under the automatic route in the chemicals sector with a few exceptions that include hazardous chemicals. FDI inflows in the chemicals sector (other than fertilizers) reached Rs. 1,39,776 crore (US$ 22.8 billion) between April 2000-September 2024.
• The government has proposed several incentives for setting up a sourcing or manufacturing platform within an Indian SEZ:
  • Single window clearance for central and state-level approvals.
  • Duty-free import/domestic procurement of goods for development, operation and maintenance of SEZ units.