India’s chemicals industry is largely de-licensed, except for a few hazardous chemicals, offering a dynamic landscape for growth and investment. Alkali chemicals dominate the sector, accounting for around 73% of total production. India ranks as the sixth-largest chemical producer globally and third in Asia, contributing approximately 7% to the country’s GDP. The industry, estimated at Rs. 21,50,750 crore (US$ 250 billion) in 2024, is projected to grow to US$ 300 billion by 2028 and Rs. 86,03,000 crore (US$ 1 trillion) by 2040, demonstrating strong resilience even amidst global uncertainties.
India holds a competitive position in global trade, ranking 14th in chemical exports and eighth in imports (excluding pharmaceuticals).
The India specialty chemicals market reached Rs. 5,83,972 crore (US$ 67.0 billion) in 2025 and is projected to reach Rs. 8,65,444 crore (US$ 93.4 billion) by 2034, growing at a CAGR of 3.65% during 2026-2034. Growth is driven by rising demand from agriculture, construction, automotive, electronics, and pharmaceutical sectors, supported by increasing industrialization, urbanization, product innovation, favorable government policies, and growing investments in sustainable chemical solutions.
The India agrochemicals market reached Rs. 1,40,327.60 crore (US$ 16.1 billion) in 2025 and is projected to grow to Rs. 2,18,677.60 crore (US$ 23.6 billion) by 2034, growing at a CAGR of 4.19% during 2026-2034. Growth is supported by rising food demand, expanding irrigation infrastructure, increasing adoption of precision agriculture, and government support for crop-input technologies.
India has long been a global leader in generics, biosimilars, and vaccines, supplying over 50% of the world’s vaccines. The disinfectants market has also seen significant growth, spurred by rising hygiene awareness and healthcare expenditures. In FY26, exports of organic and inorganic chemicals stood at Rs. 67,871.34 crore (US$ 7,680.36 million) and inorganic chemicals stood at Rs. 21,285.68 crore (US$ 2,408.70 million), respectively, while imports reached Rs. 1,33,254.10 crore (US$ 15,079.11 million) and Rs. 64,339.10 crore (US$ 7,280.65 million). During April-May 2026, exports reached Rs. 14,424.47 crore (US$ 1,528.34 million) for organic chemicals and Rs. 4,628.21 crore (US$ 490.38 million) for inorganic chemicals, while imports stood at Rs. 27,790.85 crore (US$ 2,944.57 million) and Rs. 12,239.67 crore (US$ 1,296.85 million), respectively.
Major chemical production reached 979.2 thousand metric tonnes in April 2026, while petrochemical production reached 1,565.6 thousand metric tonnes.
In April 26, production levels of various chemicals were as follows:
- Soda Ash: 278.92 (‘000 MT)
- Caustic Soda: 313.52 (‘000 MT)
- Liquid Chlorine: 230.32 (‘000 MT)
- Formaldehyde: 27.81 (‘000 MT)
- Pesticides and Insecticides: 18.21 (‘000 MT)
India has a significant share in global dye production, accounting for about 16% of dyes and intermediates, exporting to more than 90 countries. In FY26, India's dye exports (Dyes and Dye Intermediates) totalled Rs. 20,992.29 crore (US$ 2,375.50 million), reaching markets including China, Bangladesh, Italy, the US, Russia, Netherlands, Turkey, Brazil, Indonesia and Japan. In FY27 (April-May) India's dye exports (Dyes and Dye Intermediates) reached around Rs. 4,373.05 crore (US$ 463.3 million).
The sector benefits from liberalized policies, allowing industrial licensing and 100% FDI under the automatic route (excluding certain hazardous chemicals). FDI inflows in the chemicals sector (excluding fertilizers) reached Rs. 1,50,339.64 crore (US$ 24.1 billion) between April 2000-March 2026. Enhanced quality compliance through Quality Control Orders (QCOs) for over 150 products has been implemented, overseen by the Bureau of Indian Standards (BIS), ensuring higher safety and performance standards. Strategic investors from Japan, Korea, and Thailand are increasingly showing interest in Indian companies as they diversify supply chains from China.
Significant industrial developments highlight the sector’s growth trajectory. HPCL Rajasthan Refinery Limited (HRRL) commenced commercial operations at its 9 MMTPA refinery-cum-petrochemical complex in Pachpadra, Rajasthan, effective June 22, 2026. The integrated facility, developed as a joint venture between HPCL and the Government of Rajasthan, is expected to strengthen India's refining and petrochemical production capacity while supporting domestic production of fuels and petrochemical products. In March 2026, Tata Chemicals' Mithapur facility achieved a production milestone by manufacturing 1 million tonnes of soda ash during FY2025-26, reflecting the company's focus on operational excellence, asset productivity, and manufacturing efficiency. On February 6, 2026, Tata Chemicals Limited announced an investment of Rs. 515.00 crore (US$ 58.28 million) to set up a greenfield Iodised Vacuum Salt Dried (IVSD) manufacturing facility in Tamil Nadu with a capacity of 210 Kilo Tonnes Per Annum (KTPA). In September 2025, India’s bioeconomy gained momentum with the launch of the Tata Chemicals–TERI Centre of Excellence on Biochemicals to develop sustainable, bio-based chemicals using renewable feedstocks. The initiative initially focuses on 2,3-Butanediol. In October 2025, Paradeep Phosphates Limited completed the merger with Mangalore Chemicals & Fertilizers Limited, effective from October 16, 2025, increasing its total production capacity by over 23% from 3.00 million to 3.70 million tonnes per annum. Kanoria Chemicals commissioned a new Ankleshwar plant in September 2024 at Rs. 90 crore (US$ 10.22 million), adding 345 TPD of formaldehyde and 18 TPD of hexamine. In Bina, Madhya Pradesh, projects worth Rs. 50,700 crore (US$ 6.11 billion) were initiated in September 2023 to produce 1,200 KTPA of ethylene and propylene. Tata Chemicals plans a Rs. 8,000 crore (US$ 967.45 million) capex by 2027 to expand sustainably, while Shivtek Spechemi Industries will increase production capacity to 2,50,000 MTPA by 2027-28. Sudarshan Chemical’s acquisition of Germany’s Heubach Group in March 2025 established it as a global pigment leader, while Aditya Birla Group’s acquisition of Cargill’s US specialty chemicals facility marked its entry into the US market. On August 29, 2025, RIL announced it will invest Rs. 75,000 crore (US$ 8.57 billion) in its Oil-to-Chemicals (O2C) business while simultaneously accelerating its clean energy push to establish 20 GW of solar module manufacturing capacity by 2026 at its integrated green energy complex in Jamnagar, Gujarat.
India achieved record urea production of over 314 LMT in 2023-24 and produced 503 LMT of total fertilizers domestically, reducing import dependence. Further, in 2024-25 urea production stood at 306.67 lakh metric tonnes (LMT). On February 23, 2026, the Government of India 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 Union Budget 2025 launched the second Asset Monetization Plan targeting Rs. 10 lakh crore (US$ 113.6 billion) from FY25 to FY30, including PSU chemical companies, encouraging private investments and modernization. Skill development is emphasized through institutions such as the Central Institute of Petrochemicals Engineering & Technology (CIPET), which provides advanced training tailored to industry needs.
The Rajasthan Refinery Limited (RRL) is expected to become commercially operational by March 2026, with capital investment exceeding Rs. 52,877 crore (US$ 6.01 billion), generating direct employment for over 35,000 people. The government also approved five new Centers of Excellence for chemicals and petrochemicals in October 2024, with plans for three more, linking over 1,000 industries and 50 research institutions via a digital portal to foster collaboration and innovation.
In July 2025, the India-UK Free Trade Agreement (FTA) came into effect, removing tariffs on 99% of Indian exports and reducing duties on 90% of UK exports to India, with the chemicals industry emerging as a key beneficiary. The government continues to support the sector through R&D initiatives, reduction in customs duties, and promotion of the ‘Make in India’ campaign.
On October 28, 2025, Bharat Petroleum Corporation Ltd (BPCL) signed agreements with Oil India Ltd, Numaligarh Refinery Ltd and Fertilisers & Chemicals Travancore Ltd to expand refining, petrochemical and downstream operations, including a proposed Rs. 1,00,000 crore (US$ 11.43 billion) greenfield refinery and petrochemical complex in Andhra Pradesh.
Looking ahead, the government envisions a 2034 roadmap for chemicals and petrochemicals, focusing on increasing domestic production, reducing imports, and attracting investments. Plans include a production-linked incentive system with 10-20% output incentives for agrochemicals, development of end-to-end manufacturing ecosystems, and establishment of four PCPIRs (Petroleum, Chemicals, and Petrochemical Investment Regions) along with plastic parks. The Gujarat Infrastructure Development Corporation (GIDC) has invested Rs. 17,317 crore (US$ 2.09 billion) to build infrastructure for these regions. The Department of Chemicals & Petrochemicals also intends to integrate PLI schemes into the sector and revise PCPIR guidelines to further strengthen growth and competitiveness.
India’s chemicals industry is poised for a transformative decade, driven by sustained policy support, expanding global demand, and rising investments in innovation and sustainability. With increasing domestic production, robust export potential, and progressive initiatives such as PCPIRs and PLI schemes, the sector is well-positioned to become a global manufacturing powerhouse. As India advances towards its 2040 vision, the chemicals industry will play a pivotal role in shaping a resilient, technology-driven, and sustainable industrial future.
