Chemical Industry india

Chemical Industry india

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

Chemicals

ADVANTAGE INDIA

GROWING

DEMAND

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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.

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Exports of Organic and Inorganic Chemicals increase by 16.75% and reached US$ 2.50 Billion in April 2024.

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Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040.

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

Growing Demand

OPPORTUNITIES

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India’s specialty chemicals companies are expanding their capacities to cater to rising demand from domestic and overseas.

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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.

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The Dahej PCPIR project in Bharuch, has attracted an investment of Rs. 1 lakh crore (~US$ 12 billion) and is expected to generate 32,000 jobs.

Opportunities in Chemical Industry

POLICY

SUPPORT

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PLI schemes were introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crore (US$ 213.81 million).

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Under the Interim Union Budget 2024-25 the government allocated Rs. 192.21 crore (US$ 23.13 million) to the Department of Chemicals and Petrochemicals.

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The Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) set up at Paradip has attracted investments worth US$ 8.84 billion (Rs.73,518 crores) resulting in employment of about 40,000 people.

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Government to open 25,000 Jan Aushadhi Kendras to make medicines available at affordable prices.

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The PLI plan for the National Programme on Advanced Chemistry Cell Battery Storage has been approved by the Union Cabinet as of May 2021.

Policy Support

INCREASING

INVESTMENTS

AND SPENDING

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FDI inflows in the chemicals sector (other than fertilizers) reached US$ 22.146 billion between April 2000-March 2024.

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An investment of Rs. 8 lakh crore (US$ 107.38 billion) is estimated in the Indian chemicals and petrochemicals sector by 2025.

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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.

Increasing Investments and Spending

SNAPSHOT

SHOWCASE

INFOGRAPHICS

REPORTS

RELATED NEWS

Last updated: Jul, 2024

CHEMICALS INDUSTRY REPORT

May, 2024

INTRODUCTION

Covering more than 80,000 commercial products, India’s chemical industry is extremely diversified and can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. India is the 6th largest producer of chemicals in the world and 3rd in Asia, contributing 7% to India’s GDP. India's chemical sector, which was estimated to be worth US$ 220 billion in 2022, is anticipated to grow to US$ 300 billion by 2025 and US$ 1 trillion by 2040.

Globally, India is the fourth-largest producer of agrochemicals after the United States, Japan and China. India accounts for 16-18% of the world's production of dyestuffs and dye intermediates. India’s agrochemicals export was estimated to be at US$ 3.12 billion from April 2023 to December 2023. Indian colourants industry has emerged as a key player with a global market share of ~15%. The country’s chemicals industry is de-licensed, except for a few hazardous chemicals. India has traditionally been a world leader in generics and biosimilars and a major Indian vaccine manufacturer, contributing more than 50% of the global vaccine supply. 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).

chemicals manufacturers in India

From April 2023 to December 2023, India's dye exports (Dyes and Dye Intermediates) totalled US$ 1.69 billion. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, enables it to benefit on economies of scale.

MARKETS SIZE

India's chemical sector, which was estimated to be worth US$ 220 billion in 2022, is anticipated to grow to US$ 300 billion by 2025 and US$ 1 trillion by 2040. The demand for chemicals is expected to expand by 9% per annum by 2025. The chemical industry is expected to contribute US$ 383 billion to India’s GDP by 2030.

India has traditionally been a world leader in generics and biosimilars and major Indian vaccine manufacturers, 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.

An investment of Rs. 8 lakh crore (US$ 107.38 billion) is estimated in the Indian chemicals and petrochemicals sector by 2025. Specialty chemicals account for 20% of the global chemicals industry's US$ 4 trillion, with India's market expected to increase at a CAGR of 12% to US$ 64 billion by 2025.

This gain would be driven by a healthy demand growth (CAGR of 10-20%) in the export/end-user industries. The Department of Chemicals & Petrochemicals intends to bring PLI in the chemical & petrochemical sector and will redraft the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) guidelines.

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%.

A shift in the global supply chain brought on by the China+1 strategy and a resurgence in domestic end-user demand was expected to fuel significant revenue growth of 18–20% in 2022 and 14–15% in 2023.

Indian Chemical Industry Market Size

INVESTMENTS AND RECENT DEVELOPMENTS

A few recent developments/investments in the Indian chemical sector are as follows:

From April 2023 to March 2024, exports of organic chemicals stood at US$ 7.54 billion & inorganic stood at US$ 2.02 billion.

Imports of organic chemicals were US$ 14.80 billion and inorganic chemicals US$ 6.34 billion from April 2023 to March 2024.

From April 2023 to March 2024, exports of castor oil, essential oil, and cosmetics and toiletries stood at US$ 4.3 billion.

Major chemical production reached 931.2 million metric tonnes (MMT) in January 2024, while petrochemical production reached 1,863.57 MMT.In January 2024, production levels of various chemicals were as follows: Soda Ash: 255.21 MMT, Caustic Soda: 290.60 MMT, Liquid Chlorine: 205.05 MMT, Formaldehyde: 25.834 MMT, and Pesticides and Insecticides: 19.90 MMT.

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 intended 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 March 2023, Chennai awaits more bio-CNG plants to enable a 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.

In December 20222, GMM Pfaudler Ltd entered into an agreement on December 8, 2022, to acquire Mixel France SAS and its wholly owned subsidiary Mixel Agitator Co. Ltd. for US$ 7.63 million.

In September 2022, the Royal Society of Chemistry (RSC) and CSIR work together to support chemistry in schools across India.

In September 2022, Spanish perfume maker Puig acquired a controlling stake in Kama Ayurveda Pvt. owning 85% of the company.

In May 2022, a global investment firm, PAG acquired Optimus Group along with consortium partners CX Partners and Samara Capital.

In April 2022, Dorf Ketal, a manufacturer of research-based specialised chemicals acquired Khyati Chemicals for Rs. 300-400 crore (US$ 36.28 - 48.48 million).

Advent International acquired a majority position in Avra Labs in January 2022, uniting it with two other businesses it had previously acquired, RA Chem Pharma and ZCL Chemicals.

In July 2022, NTPC Renewable Energy Limited (NTPC REL) and Gujarat Alkalies and Chemicals Limited (GACL) signed an MoU to establish India's first commercial-scale Green Ammonia and Green Methanol plants.

In November 2021, Indian Oil Corporation (IOCL) announced plans to invest Rs. 3,681 crore (US$ 495.22 million) to set up India’s first mega-scale maleic anhydride unit for manufacturing high-value speciality chemicals at its Panipat Refinery in Haryana.

In November 2021, Praj Industries Limited and Indian Oil Corporation inked a memorandum of understanding (MoU) to explore opportunities in the production of alcohol-to-jet (ATJ) fuels, 1G & 2G ethanol, compressed bio-gas (CBG) and related opportunities in the biofuels industry.

In November 2021, Coromandel International announced plans to set up a 1,650-metric-tonnes-per-day sulphuric acid plant at its fertiliser complex in Visakhapatnam with an investment of Rs. 400 crore (US$ 53.69 million).

On September 30, 2021, Prime Minister, Mr. Narendra Modi, inaugurated the CIPET: Institute of Petrochemicals Technology, Jaipur.

In October 2021, Nayara Energy announced that it expects 15-20 new integrated petrochemical plants to become operational within the next decade in the country, to meet the rising demand for raw materials used in the plastics and clothing industries.

In October 2021, Rosneft, Russia, launched a large-scale petrochemical production development programme in India with investments worth ~US$ 750 million at the current implemented stage.

In September 2021, Bharat Petroleum Corporation (BPCL), announced plans to invest US$ 4.05 billion, to improve petrochemical capacity and refining efficiencies over the next five years.

The government is planning to hold roadshows in eight overseas markets for the proposed investors’ summit planned in January 2022, with a focus on the petrochemicals sector, and is eager to attract investors to its newly launched Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) near the upcoming crude oil refinery in Pachpadra village (in Barmer district, Rajasthan).