India’s chemicals industry is de-licensed, except for a few hazardous chemicals. In the Indian chemical industry, alkali chemicals have the largest share with ~73.3% of the total production from April to March (2022-23). India is the 6th largest producer of chemicals in the world and 3rd in Asia, contributing 7% to India’s GDP. The Indian chemical industry is currently valued at US$ 220 billion and is expected to reach US$ 300 billion by 2030 and US$ 1 trillion by 2040. This industry remains an active hub of opportunities, even in an environment of global uncertainty.
India holds a strong position in exports and imports of chemicals at a global level and ranks 14th in exports and 8th in imports at the global level (excluding pharmaceuticals). The chemicals industry in India covers more than 80,000 commercial products with an overall market size standing at US$ 232.6 billion in 2021-22. The speciality chemicals sector is expected to reach US$ 64 billion by 2025. India has traditionally been a world leader in generics and biosimilars and a major vaccine manufacturer, contributing more than 50% of the global vaccine supply. Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040.
The Indian chemical industry is expected to further grow with a CAGR of 11-12% by 2027, increasing India’s share in the global specialty chemicals market to 4% from 3%. According to a CRISIL report, the speciality chemicals market in India would grow faster than China, increasing its market share to 6% by 2026 from 3-4% in fiscal 2021. The report further states that a shift in the global supply chain brought on by the China+1 strategy and a resurgence in domestic end-user demand will fuel significant revenue growth. India has traditionally been a world leader in generics and biosimilars and a major vaccine manufacturer, contributing more than 50% of the global vaccine supply.
From April to November 2024, exports of organic chemicals stood at Rs. 45,001 crore (US$ 5.2 billion) & inorganic stood at Rs. 12,548 crore (US$ 1.45 billion).
Imports of organic chemicals were Rs. 96,059 crore (US$ 11.1 billion) and inorganic chemicals Rs. 36,347 crore (US$ 4.2 billion) from April to November 2024.
Major chemical production reached 1,008.9 thousand metric tonnes in December 2024, while petrochemical production reached 1,840.22 thousand metric tonnes.
In December 2024, production levels of various chemicals were as follows:
- Soda Ash: 295.65 (000 MT).
- Caustic Soda: 319.48 (000 MT).
- Liquid Chlorine: 218.20 (000 MT).
- Formaldehyde: 28.06 (000 MT).
- Pesticides and Insecticides: 18.49 (000 MT).
In April-November 2024, the export of agrochemicals was Rs. 23,885 crore (US$ 2.76 billion), dyes were Rs. 13,673 crore (US$ 1.58 billion) and the other dye intermediates were Rs. 883 crore (US$ 102 million).
Imports of castor oil, essential oil, and cosmetics and toiletries are Rs. 15,577 crore (US$ 1.8 billion) during April-November 2025.
The import of agrochemicals was Rs. 10,385 crore (US$ 1.2 billion), dyes were Rs. 1,869 crore (US$ 216.4 million) and the other dye intermediates were Rs. 7,849 crore (US$ 907.9 million) during April-November 2024.
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.
Despite decreasing demand for polymers due to the COVID-19 pandemic, India is likely to witness growth to ~32 million tonnes from 2020 to 2030.
India is a global supplier of dye, accounting for ~16% of the global production of dyestuffs and dye intermediaries. India has a strong presence in the global market exporting to more than 90 countries in the subsegment of dyes, pharmaceuticals, and agrochemicals. From April 2023 to March 2024, India's dye exports (Dyes and Dye Intermediates) totalled US$ 2.32 billion. The country exports dyes to Germany, the UK, the US, Switzerland, Spain, Turkey, Singapore, and Japan. The Indian dyes and pigments market is projected to reach US$ 63.0 billion by 2022.
The domestic chemicals sector's small and medium enterprises are expected to showcase 18-23% revenue growth in FY22, owing to an improvement in domestic demand and higher realisation due to high prices of chemicals. Domestic demand is expected to rise from US$ 170-180 billion in 2021 to US$ 850-US$ 1,000 billion by 2040. Gross bank credit for Chemicals and Chemical products grew by 1% in March 2024 as compared to the previous month.
Supply disruption in China has caused the global end-user industries to diversify their vendor base mainly towards Indian players. The closure of plants in the EU and China due to increasing environmental concerns has favoured Indian manufacturers to invest further in speciality chemicals. From April 2023 to December 2023, exports of organic chemicals decreased 23.8% YoY, while exports of inorganic chemicals increased 18.18% YoY.
In the chemical sector, industrial licensing and 100% FDI, under the automatic route, are allowed with the exception to a few 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.
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.
Indian companies are witnessing interest from strategic investors led by Japan, Korea and Thailand, as they seek to diversify supply chains from China.
In Bina, Madhya Pradesh, the Prime Minister, Mr. Narendra Modi, laid the foundation stone of development projects worth more than Rs. 50,700 crore (US$ 6.11 billion) on September 14, 2023. The refineries will produce about 1,200 Kilo-Tonnes Per Annum (KTPA) of ethylene and propylene, vital components for various sectors like textiles, packaging, and pharma, among others.
In August 2023, the Prime Minister announced a subsidy of Rs. 10 lakh crore (US$ 120.93 billion) for providing cheaper Urea to farmers.
In July 2023, Global Chemicals and Petrochemicals Manufacturing Hubs in India (GCPMH 2023) was organized in Delhi, India.
In June 2023, Himadri Speciality Chemical invested Rs. 58 crore (US$ 7.01 million) in Sicona Battery Technologies Pty Ltd, (Sydney) for a 12.79% stake.
In June 2023, Mumbai-based UPL Ltd will hive off its speciality chemicals business on a slump sale basis to a wholly owned arm of UPL Speciality Chemicals Ltd for Rs. 3,572 crore (US$ 431.96 million).
In June 2023, Reliance plans to invest Rs. 75,000 crore (US$ 9.06 billion) over 5 years to expand its oil to chemical business.
Tata Chemicals intends to invest about Rs. 8,000 crore (US$ 967.45 million) over the next 2-3 years as capex on an expansion spree that includes scaling businesses sustainably.
In May 2023, Reliance Industries plans to set up a 10 GW solar project in Andhra Pradesh.
In April 2023, the Cabinet approved the National Medical Devices Policy, 2023.
In March 2023, Chennai awaits more bio-CNG plants to enable the switch to clean energy.
On February 15th, 2023, the Indian Speciality Chemical Manufacturer Association (ISCMA) signed an MoU with USIIC to promote trade in speciality chemicals.
In February 2023, the company is setting up a new formaldehyde plant with 300 TPD capacity at the existing manufacturing facility at GIDC, Ankleshwar in Gujarat.
In January 2023, Tata Chemicals Europe signed a pact with Essar-backed Vertex for the sale of low-carbon hydrogen.
The Indian Government supports the Industry through research & development and initiatives such as reducing basic customs duty on several imported products and promoting the ‘Make in India’ campaign.
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.
Lower per capita consumption and ease of doing business are promoted by the Indian government; this reflects good investment opportunities with huge growth potential.
The government has established four Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) as investment regions for petroleum, chemicals and petrochemicals, along with associated services. Plastic parks have been set up to facilitate technology development and a conducive ecosystem to produce specialised plastic products. The Gujarat Infrastructure Development Corporation (GIDC) has made an investment of around Rs. 17,317 crore (US$ 2.09 billion) for infrastructure development in the PCPIR.
The Department of Chemicals & Petrochemicals intend to bring PLI into the chemical & petrochemical sector and will redraft the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) guidelines.
