Indian Chemicals Industry Analysis

India is the second-highest producer and consumer of chemical fertilisers in the world.

Advantage India

Growing
Demand

* Rise in demand from end-user industries such as food processing, personal care and home care is driving development of different segments in India’s specialty chemicals market.

* Domestic demand is expected to rise from US$ 170 billion-US$ 180 billion in 2021 to US$ 850 billion-US$ 1,000 billion by 2040.

* India is the 6th largest producer of chemicals in the world and 3rd in Asia, contributing 7% to India’s GDP.

Growing Demand

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.

Opportunities in Chemical Industry

Policy
Support

* The government plans to introduce production-linked incentive (PLI) scheme to promote domestic manufacturing of agrochemicals.

* Under the Union Budget 2023-24 the government allocated Rs. 173.45 crore (US$ 20.93 million) to the Department of Chemicals and Petrochemicals.

Policy Support

Increasing
Investments
and spending

* FDI inflows in the chemicals sector (other than fertilisers) reached US$ 20.96 billion between April 2000-December 2022.

* The Department of Chemicals & Petrochemicals intend to bring PLI in chemical & petrochemical sector and will redraft the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) guidelines.

Increasing Investments and Spending
Last updated: Sep, 2023

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