Chemicals

India's chemicals sector is a crucial component of the country's economy, contributing around 1.4% to its GDP and accounting for almost 9% GVA. India ranks as the sixth-largest producer of chemicals, and second largest manufacturer and exporter of dyes and pigments. The sector is highly diversified, encompassing a broad range of sub-industries such as petrochemicals, specialty chemicals, agrochemicals, pharmaceuticals, and dyes and pigments. It also plays a vital role in supporting various end-use industries, including agriculture, textiles, automotive, and consumer goods. India is one of the world's largest producers of agrochemicals and dyes, and it has a rapidly growing specialty chemicals market, driven by increased domestic consumption and export demand.

The sector's growth is driven by strong domestic demand, government initiatives, and an expanding export market. India's large population and rapid urbanization fuel demand for chemicals across multiple industries, particularly in pharmaceuticals, consumer goods, and construction materials. The Indian government has introduced policies such as the Production-Linked Incentive (PLI) scheme, reduced import duties on raw materials, and initiatives like ‘Make in India' to promote domestic production and attract foreign investment. Additionally, India exports chemicals to over 175 countries, with growing demand from markets in North America, Europe, and Southeast Asia. The sector benefits from a strong manufacturing base and competitive costs, further enhancing its global presence.

In Chemicals sector, 100% FDI in India is allowed under the automatic route (except in the case of certain hazardous chemicals). Manufacture of most chemical products, interalia, covering organic/inorganic, dyestuffs & pesticides is de-licensed.