Snapshot

World's Chemical Nucleus

Chemicals and Chemical products sector (industry division 20 of NIC 2008) accounted for 1.42% of the GVA for all economic activies in 2020-21 at constant prices (at 2011-12 prices)

Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into Bulk chemicals, Specialty chemicals, Agrochemicals, Petrochemicals, Polymers and Fertilizers. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, makes for economies of scale.

India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates. Chemicals industry in India has been de-licensed except for few hazardous chemicals. Upcoming Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) and Plastic parks will provide state-of-the-art infrastructure for Chemicals and Petrochemicals sector.

  • The production of Total Major Chemicals and Petrochemicals in 2022-23 (up to Sept 2022) is 26570 thousand MT.
  • CAGR in the production of Total Chemicals and Petrochemicals during the period 2017-18 to 2021-22 is 4.61%.
  • India ranks 11th in the World Exports of Chemicals (excluding pharmaceutical products) and ranks 6th in the World Imports of Chemicals (excluding pharmaceutical products).
  • FDI in Chemicals sector (excluding fertilizers) is $21.71 (Apr 2000 to Sept 2023) 
  • Indian chemical industry employs more than 2 Mn people.
  • The production of Major Chemicals in 2023-24 (up to Aug 2023) is 53.54 Lakh Tonnes.
  • The combined exports of Major Chemicals and Major Petrochemicals in the year in 2023-24 (Apr 2023- Aug 2023) has decreased to INR 44.09 Thousand Cr from INR 59.86 Thousand Cr over the corresponding period of last year (Apr 2022-Aug 2022).

100% FDI is allowed under the automatic route in the chemicals sector (except in the case of certain hazardous chemicals).

For further details, please refer to FDI Policy

  • %

    Share of GVA in Chemical manufacturing sector

  • %

    Chemical products exports share

  • %

    YoY Growth in production of Major Petrochemicals (till Aug 2023)

Third largest consumer of polymers in the world

Fourth largest producer of agrochemicals in the world

Sixth largest sale of chemicals in the world

Industry Scenario

The market size of Chemicals & Petrochemicals sector in India is around $215 Bn; expected to grow to $300 Bn by 2025.

  • Exports of Chemicals and Chemical products (excluding pharmaceutical products and fertilizers) contributed 11.7% of total export in the year 2021-22 compared to 12.9% in the year 2020-21. It contributed 10.8% of total export in the year 2022-23 (up to Sept 2022). 
  • CAGR in Export of total Chemicals and Chemical products (excluding pharmaceutical & fertilizer products) during the period 2017-18 to 2021-22 was 13.86% while CAGR of total national export was 12.62%. 
  • The compounded average growth rate(CAGR) during the period 2017-18 to 2021-22 was 4.4% for manufactured product based on WPI while it was 4.4% for Chemicals and Chemical Products.
  • The Index of Industrial Production of Chemical & Chemical products achieved record to 137.2 in Jul, 2022 as against the lowest value of 109.1 recorded in May 2021.
  • The quantum of production of Major Chemicals decreased to 53.54 Lakh Tonnes during 2023-24 (up to Aug 2023) as compared to 54.32 Lakh Tonnes during the corresponding period of the previous year. 
  • The quantum of production of certain Petrochemicals such as Synthetic Detergent
    Intermediates was 34.07 Lakh Tonnes in 2023-24 (up to Aug 2023)
  • Production of Organic Chemicals has increased (Up to Aug 2023) as compared to the corresponding period of the previous year, recording an increase of 4.52%. 
  • The quantum of production of Major Petrochemicals increased (up to Aug 2023) compared to corresponding period of previous year recording an increase of 6.08%.

GROWTH DRIVERS

  • Rising disposable income, median age of population, urbanisation and growing penetration and demand from rural markets

  • Shift in production and consumption towards Asian and Southeast Asian countries in all sectors leading to increasing demand for Chemicals and Petrochemicals

  • Shift in consumer preferences towards a healthier lifestyle and environment-friendly products

  • Production Linked Incentives scheme for manufacturing of Advance Cell Chemistry Battery under Atmanirbhar Bharat Abhiyaan

arrowarrow

Production Linked Incentives (PLI) Scheme

The Union Cabinet on 12 May, 2021 approved a Production Linked Incentive (PLI) Scheme for setting up manufacturing facilities for Advance Chemistry Cell (ACC), Battery Storage in India, with a total manufacturing capacity of 50 Giga Watt Hour (GWh) for 5 years. The Scheme aims to enhance India’s Manufacturing Capabilities and Exports — for manufacture of Advance Chemistry Cell (ACC) in India and envisages incentivizing large domestic and international players in establishing a competitive ACC battery set-up in the country. Under the PLI Scheme for ACC, the production-linked subsidy is based on applicable subsidy per KWh and percentage of value addition achieved on actual sale for manufacturers who set up production units with a capacity of at least 5 GWh up to a maximum of 20GWh. Ministry of Heavy Industries, on 22nd October 2021 has released Request for Proposal (RFP) inviting bids from domestic and international players for setting up manufacturing facilities for Advance Chemistry Cell (ACC) Battery Storage in India under the ACC Production Linked Incentive (PLI) Scheme. In response to the EoI, total 10 domestic/international manufacturers submitted their proposal for ~130 GWh as per technical bids opened on 15.01.2022.

  • INR 18,100 Cr

    Scheme Outlay

Ministry

Industrial Land Bank Portal

GIS - based map displaying available infrastructure for setting up business operations in the state.

Investible Projects

Investment Opportunities in Chemicals

    Major Investors

    Latest In Chemicals

    Press Release Jan 02, 2024

    Year End Review 2023: Department of Chemicals and Petrochemicals

    Read Now

    Press Release

    Year End Review 2023: Department of…

    Brochure

    Chemicals: New India's Growth Catalyst

    Press Release

    Year- end-Review 2022: Department of…

    Report

    Remission of Duties and Taxes on Exported…

    Report

    Inside India's Production Linked Incentive…

    FAQs

    Frequently
    Asked Questions

    What are the restrictions on export of chemicals as per SCOMET list?
    a. Export of Category 1A chemical is prohibited.
    b. Export of chemicals listed in Category 1B is permitted only to States party to the Chemical Weapons Convention after obtaining an authorization from DGFT. The list of State Parties to the Chemicals Weapons Convention (CWC) and countries which are not State Parties is available on the OPCW website link.
    c. Export of Chemicals in Category 1C is allowed to State Parties to the CWC without an export licence subject to the condition that the exporter shall notify within 30 days of export to the National Authority, Chemicals Weapons Convention, Cabinet Secretariat; the Ministry of External Affairs (D&ISA); the Department of Chemicals & Petro-chemicals, and the DGFT of such exports in the prescribed format (Aayat Niryat Form ) along with the End Use Certificate and submit to the DGFT a copy of the bill of entry into the destination State Party within 30 days of delivery. Export of chemicals in Category 1C to states not party to the Chemical Weapons Convention shall continue to be restricted and shall continue to be restricted and will be allowed only against an export licence and a Government signed EndUse-Certificate, and in that case also exporters shall submit to the DGFT a copy of the bill of entry into the destination country within 30 days of delivery.
    d. The sub-category 1D of SCOMET titled ‘Other Chemicals’ contains 25 AG controlled chemical precursors.
    1. Export of chemicals in this category is allowed to countries specified in Table 1 (given in category 1D) without an export licence subject to the condition that the exporter shall notify within 30 days to specified departments
    2. Export of chemicals in this category to other countries shall be restricted and will be allowed only against an export licence, and in that case the exporter shall submit to the DGFT a copy of the bill of entry into the destination country within 30 days of
    delivery.
    3. Countries in Table 1 include Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malta, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, United States.
    e. Notification no. 56(RE-2013)/2009-14 dated 12.12.2013 has been rescinded since the three chemicals covered in the notification are now included in Category 1D. 
    For more information, please click here.

    Was it helpful?

    Where can we find the list of SCOMET items?

    Appendix 3 of Schedule 2 of ITC (HS) Classification contains the control list of India which is also referred to as the SCOMET list. You can go to the DGFT website to see the complete list. In the list as appearing in Appendix 3 of Schedule 2 of ITC (HS) Classification, SCOMET items are listed under eight (9) categories as follows:
    a) Category 0: Nuclear material, nuclear-related other materials, equipment and technology.
    b) Category 1: Toxic chemical agents and other chemicals.
    c) Category 2: Micro-organisms, toxins.
    d) Category 3: Material, Materials Processing Equipment, and related technologies.
    e) Category 4: Nuclear-related other equipment, assemblies and components; test and production equipment; and related technology, not controlled under Category 0.
    f) Category 5: Aerospace systems, equipment including production and test equipment, related technology and specially designed components and accessories thereof.
    g) Category 6: Munitions List.
    h) Category 7: Electronics, computers, and information technology including information security.
    i) Category 8: Special Materials and Related Equipment, Material Processing, Electronics, Computers, Telecommunications, Information Security, Sensors and Lasers, Navigation and Avionics, Marine, Aerospace and Propulsion.
    Each category contains exhaustive listing of items covered under that category. Special conditions applicable to items under different categories are mentioned under each category. 
    For more details, please visit the following link.

    Was it helpful?

    Who gives license for Category 0 items in the SCOMET list?

    Licensing authority for items in Category 0 in Appendix 3 to Schedule 2 of ITC (HS) is Department of Atomic Energy. Applicable guidelines are notified by the Department of Atomic Energy under Atomic Energy Act, 1962. For certain items in Category 0, formal assurances from the recipient State will include non-use in any nuclear explosive device. Authorizations for export of certain items in Category 0 will not be granted unless transfer is additionally under adequate physical protection and is covered by appropriate International Atomic Energy Agency (IAEA) safeguards, or any other mutually agreed controls on transferred items. Export of items specified under the Note 2 of the ‘Commodity Identification Note’ of the SCOMET list would also be permitted against an authorization granted by the Department of Atomic Energy. 
    For more details, please visit the following link. 

    Was it helpful?

    What are the documents to be submitted for the application on SCOMET Authorization?

    The following documents need to be uploaded online while making the application:
    i) End Use-cum-End User Certificate(s) (EUC) from all the firms/entities involved in the supply chain of the product(s) (to be furnished on their letter head duly signed by the authorised signatory).
    ii) Copy(ies) of Purchase Order(s) of firm(s) involved in the supply chain of the item/product.
    iii) Aayat Niryat Form (ANF)-1 (Profile of Exporter).
    iv) Elaborate technical specification relating to item of export.
    v) Copy(ies) of supply contract/agreement {if documents are bulky only the relevant portion containing contract reference and parties to the contract and the portion indicating the item(s) to be supplied and quantity thereof not exceeding 10 pages shall be uploaded).
    vi) Copy of DGFT authorization letter for the same product, if any in case of application for repeat orders.

    Hard copy (Paper copy) of the following documents are required to be submitted to DGFT (HQ):
    i) Original End Use-cum-End User Certificate (EUC).
    ii) Copies of Bills of Entry into the destination country for items exported during the last one year. 
    For more details, please visit the following link.

    Was it helpful?

    Is export of SCOMET items regulated?

    Yes, export of items in the SCOMET list is regulated as per India’s Foreign Trade Policy. Export is either prohibited or is permitted under an authorization. 
    For more details, please visit the link. 

    Was it helpful?

    VIEW ALL