Growth of Chemical Industry in India - Infographic

Exports of Chemicals and allied Products reached Rs.1.81 lakh crore (US$ 20.54 billion) during FY26.

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 Rs.181,568.25 crore (US$ 20.54 billion) during FY26. In FY27 (April-May) the exports of chemicals stood at around Rs. 36,336.30 crore (US$ 3.85 billion).

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.

* The Bulk Drug Parks Scheme, with an outlay of Rs. 3,000 crore (US$ 349.6 million). Three Bulk Drug Parks have been approved in Andhra Pradesh, Gujarat and Himachal Pradesh, with the scheme extended until FY27

* The Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in Odisha has attracted cumulative investments of approximately Rs. 1.44 lakh crore (US$ 17.3 billion), generated employment for around 40,000 people, and currently comprises 13 chemical units

Increasing
Investments
and spending

* FDI inflows in the chemicals sector (other than fertilizers) reached Rs. 1,50,339.64 crore (US$ 24.1 billion) between April 2000-March 2026.

* 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 in Gujarat has attracted cumulative investments of approximately Rs. 1,28,509 crore (US$ 15.42 billion), generated employment for over 2.45 lakh people, and currently comprises 2,079 chemical units, making it India's largest operational PCPIR.

Snapshot Showcase Infographics Reports

Last updated: May, 2026

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