Indian Economy News

Economic Survey 2025–26 Highlights Steady Growth of Chemicals and Petrochemicals Sector

The Economic Survey 2025-26 points out the consistent and increasing support from the Chemicals and Petrochemicals industry to the Indian economy. It is observed that this industry contributed 8.1% to the total manufacturing Gross Value Added (GVA) in FY24, emphasizing its vital role in increasing manufacturing performance and employment. The industry has very strong backward linkages with petroleum refining and natural gas processing, and strong forward linkages with various downstream industries like the automotive sector, pharmaceuticals, agriculture, plastics, and consumer goods. The Economic Survey emphasizes that because of these strong linkages, the industry has been able to withstand global supply chain disruptions, thanks to the large domestic market and increasing export potential.
Over the last decade, the production of major chemicals and petrochemicals has shown a consistent increase, reflecting positive industrial performance. The production increased from 45,638 thousand metric tonnes (MT) in FY16 to 58,617 thousand MT in FY25, registering a CAGR of 2.8% during FY16-FY25. This consistent increase in production volumes reflects the increasing competitiveness and expansion of capacities, thanks to technology adoption, investment in modern processing units, and policy support for scaling up. As India plans to emerge as a global leader in chemicals production, the performance of this industry in the Economic Survey emphasizes its vital role in enhancing industrial performance, economic resilience, and growth.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.