Advantage India
Growing
Demand
* Rise in demand from end-user industries such as food processing, personal care and home care is driving the development of different segments in India’s specialty chemicals market.
* India is the sixth largest producer of chemicals in the world and third in Asia, contributing 7% to India’s GDP.
* According to a McKinsey report, Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040.
* Exports of Chemicals and allied Products reached US$ 18,652 million) during FY26 (April-February).
Opportunities
* India’s specialty chemicals companies are expanding their capacities to cater to rising demand from domestic and overseas.
* With global companies seeking to de-risk their supply chains, which are dependent on China, the chemical sector in India has the opportunity for a significant growth.
* In the specialty chemicals sector, manufacturers are focusing on green solvents, biodegradable surfactants, and bio-based polymers, with India’s green chemicals market expected to grow at a CAGR of over 10% and exceed US$ 15 billion by 2027.
Policy
Support
* As part of the Union Budget 2026-27 the government allocated Rs. 185.72 crore (US$ 21.0 billion) to the Ministry of Chemicals and Fertilizers. •
* In November, 2025, Government of India launched a scheme for Rare Earth Permanent Magnets (REPM) with a financial outlay of Rs. 7,280 crore (US$ 824 million) to develop domestic manufacturing capacity of around 6,000 MTPA.
* PLI schemes were introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crore (US$ 213.81 million).
* The Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) set up at Paradip has attracted investments worth Rs.73,518 crores (US$ 8.84 billion) resulting in employment of about 40,000 people.
Increasing
Investments
and spending
* FDI inflows in the chemicals sector (other than fertilizers) reached Rs. 1,48,744 crore (US$ 23.9 billion) between April 2000-December 2025.
* In February 2026, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman launched the National Monetisation Pipeline 2.0 (NMP 2.0) with an estimated monetisation potential of Rs. 16.72 lakh crore (US$ 189.16 billion) for FY26–FY30. The pipeline includes private sector investment of Rs. 5.80 lakh crore (US$ 65.63 billion) and aims to support infrastructure development by unlocking value from public assets across key sectors.
* The Dahej PCPIR project in Bharuch, comprising 180 existing and 650 under construction industrial units has attracted an investment of Rs. 1 lakh crore (~US$ 12 billion) and is expected to generate 32,000 jobs.
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