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 September 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 $21.48 Bn (April 2000 to June 2023)
- Indian chemical industry employs more than 2 Mn people.
- The production of Major Chemicals in 2022-23 (up to September 2022) is 6487 thousand MT.
- The combined exports of Major Chemicals and Major Petrochemicals in the year in 2022-23 (April 2022- March.,2023) has decreased to INR128.34 Thousand Cr from INR 141.31 Thousand Cr over the corresponding period of last year (April 2021-March,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
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Share of GVA in Chemical manufacturing sector
- %
Chemical products exports share
- %
CAGR in production of Major Petrochemicals
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
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
Industry Scenario
The market size of Chemicals & Petrochemicals sector in India is around $178 Bn; expected to grow to $300 Bn by 2025.
- Exports of Chemicals and Chemical products (excluding pharmaceucal products and ferlizers) 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 (upto September, 2022).
- CAGR in Export of total Chemicals and Chemical products (excluding pharmaceucal & ferlizer 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 July, 2022 as against the lowest value of 109.1 recorded in May, 2021.
- The quantum of production of Major Chemicals increased to 13 Mn Tonnes during 2022-23 (up to March 23’) as compared to 12.7 Mn Tonnes during the corresponding period of the previous year.
- The quantum of production of certain Petrochemicals such as Performance Plastics was 1,960 Kilo Tonnes in April 2022 to March 2023.
- Production of Major Chemicals has increased (Up to March, 2023) as compared to the corresponding period of the previous year, recording an increase of 2.19%. Production of Alkali chemicals sub segment has increased by 5%.
- The quantum of production of Major Petrochemicals declined (up to March, 2023) compared to corresponding period of previous year but Performance Plastic sub segment has indicated an increase of 15%.
- Production of Major Chemicals increased to 130.22 Lakh Tonnes during 2022-23 (Up to March, 2023) as compared to 127.43 Lakh Tonnes during the corresponding period of the previous year, recording an increase of 2.19%.
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


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