August 30, 2012
India's growing population and dependency on agriculture drives chemical sector demand. From April 2000-April 2012, total foreign direct investment (FDI) inflows into the Indian chemicals industry (excluding fertilisers) was US$ 9.8 billion.100 per cent FDI is permissible in the Indian chemicals sector; manufacturing of most chemical products are de-licensed.
Total production in the Indian Chemical industry were 8,022 million tonne (MT) in FY 11, registering a seven per cent increase over FY10. External demand has also contributed strongly to the growth in the industry. Base chemicals covers three fourth (74 per cent) of the Indian chemical industry; the segment was valued at US$ 43.3 billion in FY10 followed by pharmaceuticals (16.8 per cent) and biotechnology (7.7 per cent).
Agrichemicals and specialty chemicals are the minor components of the sector accounting for 0.5 per cent and 0.9 per cent of production in the first half of FY12. Speciality chemicals are relatively high valued; The sector is rapidly growing and have a diverse end-product market.
Chemicals constitutes more than 14 per cent of India's total exports. Total exports of chemicals grew from US$ 3.6 billion in FY03 to US$ 11.4 billion in FY10, a compound annual growth rate (CAGR) of 18.4 per cent.