CHEMICAL SECTOR OVERVIEW
Statistics, news & updates: everything you need to know about the Chemical Industry in India
Summary/Snapshot
Chemical Industry
- India’s chemical sector (which includes fertilizers and pharmaceuticals) is worth the US $178 billion in 2019 and is anticipated to expand to US $304 billion by 2024-25, with an annual growth rate of 9.3%.
- The chemical sector accounts for 2.1 per cent of the country’s overall FDI equity inflows.
- India accounts for ~16% of the world production of dyestuffs and dye intermediates.
- The Indian chemicals and petrochemicals sector is expected to receive an investment of US$ 107.38 billion by 2025.
- In India, specialty chemicals account for 22% of the entire chemicals and petrochemicals market. The demand for specialty chemicals is anticipated to grow at a 12 per cent compound annual growth rate (CAGR).
- Presence of prominent global players, such as BASF, Dow Chemicals, Bayer and others, 100% FDI in the chemicals sector and stringent laws on anti-dumping to drive the Indian chemical market.
- With the increasing demand for disinfestation of personal and public places, the chloro-alkali, ethanol, personal care, and surfactant industry are expected to record significant growth in the near future.
- The government wants to boost ethanol blending to 10% by 2022 and 20% by 2025, from its current level of 1.58 per cent.
Growth Drivers
- India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, enables it to benefit on economies of scale.
- The dedicated integrated manufacturing hubs under Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) policy to attract an investment of US$ 276.46 billion by 2035.
Sub industries
- Agrochemicals
- Petrochemicals & Polymers
- Pesticides & Fertilisers
- Specialty Chemicals
Opportunities
- Specialty chemical firms in India are growing their capacity to meet increased domestic and international demand.
- With global corporations looking to de-risk their supply chains that are reliant on China, India’s chemical sector has a lot of room for expansion.
Challenges
- Inadequate infrastructure facilities
- High costs of basic raw materials like natural gas and crude oil,
- High cost of capital
- Need for technological modernisation of its facilities.
Key Investment Opportunities
- Dyestuff industry
The dyestuff industry is a significant sub-sector of the chemical industry, ranking second in Asia. It also has a 16 percent share of the global market. It has forward and backward connections to a variety of industries, including paper, textiles, plastics, printing inks, leather, and food. The sub-sector has enormous potential and offers investors a lucrative opportunity.
- Pesticides industry
India is the world’s fourth-largest producer of agrochemicals. The country ranks as one of the most dynamic generic pesticide manufacturers in the world, with over 45 technical-grade pesticides created in the country. Because it is a net exporter, it makes a major contribution to the country’s foreign exchange basket.
- Fine & specialty chemicals
India manufacturers use many fine and specialty chemicals that are necessary for improving industrial output. In the rubber sector, these unique compounds are widely used as polymer additives, food additives, pigments, and anti-oxidants.
Recent Developments
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.
- Government initiatives such as promotion of small and midsized ‘Sodium Bicarbonate’ and ‘Ammonia’ processing industries in proximity to soda ash manufacturing units is likely to boost demand for soda ash in the country.
Key Players of India
National
- Tata Chemicals Ltd
- Pidilite Industries Ltd
- UPL Ltd
- Gujarat Fluoro Chemicals Ltd
- Aarti Industries Ltd
- Gujarat Alkalies & Chemicals Ltd
- United Phosphorus Limited
International
- BASF
- DowDuPont
- SINOPEC
- SABIC
- INEOS
- ExxonMobil
- Mitsubishi Chemical Corporation
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