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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%.
- FDI in the Chemicals sector (excluding fertilizers) is $ 20.96 Bn (April’2000 to December 2022).
- India ranks 11th in the World Exports of Chemicals (excluding pharmaceutical products) and ranks 6th in the World Imports of Chemicals (excluding pharmaceutical products).
- 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 2022-23 (up to September 2022) is $ 9 Bn, an increase of 2% from last year’s export value, Imports have increased to $ 13.33 Bn.
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
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Chemical products exports share
- %
CAGR in producon 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 6.48 mn tonnes during 2022-23 (up to September 2022) as compared to 6.3 Mn tonnes during the corresponding period of the previous year.
- The quantum of production of certain Petrochemicals such as Synthetic Rubber and Performance Plastics was 175 kilo tonnes and 973 kilo tonnes, respectively from the period April 2022 to September 2022.
- Overall growth in production of Major Chemicals in 2022-23 (up to September 2022) over 2021-22 (up to September 2021) has been 3.27% with a major rise accounted in the majority of sub sectors
- Pesticides and Insecticides: 10.51%
- Alkali Chemicals: 6.93%
- Inorganic Chemicals: 1.56%
- Overall growth in production of Petrochemicals in 2022-23 (Up to September 2022) has declined by 7.64% but certain sub-sectors have recorded an increase in production
- Performance Plastic: 25.13%
- Synthetic rubber: 10.29%
- Synthetic fibre: 1.47%
- Production of Major Chemicals for the year 2022-23 (Up to September 2022) is 6488.6 Metric Kilo Tonne and production of Petrochemicals for the year 2022-23 (Up to September 2022) is 20235.9 Metric Kilo Tonne
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
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