Snapshot

World's chemical nucleus

Market size of Chemicals & Petrochemicals sector in India is worth ~$178 bn

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 Chemicals and Petrochemicals market is projected to reach $300 bn by 2025
  • India ranks 11th in the World Exports of Chemicals (excluding pharmaceutical products) and ranks 6th in the World Imports of Chemicals (excluding pharmaceutical products)
  • The combined exports of Major Chemicals and Major Petrochemicals in the year 2021-22 (up to February 2022) has increased to INR 129.24 thousand crores from INR 90.9 thousand crores. Imports have increased to INR 152.65 thousand crores from INR 92.03 thousand crores over the corresponding period of last year
  • Demand for chemical products is expected to grow at approximately 9% p.a. during 2020-25
  • Indian chemical industry employs more than 2 mn people
  • Fertilizers production (weight: 2.63 %) increased by 6.2 % in July 2022 over July 2021. Its cumulative index increased by 11.3 % during April to July 2022-23 over the corresponding period of previous year.

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

  • %

    Nation’s Gross Value Added

  • %

    Chemical products exports share

  • %

    Contribution to global chemical sales

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 $178 bn; expected to grow to $300 bn by 2025.

  • The quantum of production of Major Chemicals increased to 21.52 lakh tonnes during 2022-23 (Up to May 2022) as compared to 19.97 lakh tonnes during the corresponding period of the previous year, recording an increase of 7.75%.
  • Overall growth in production of Major Chemicals in 2021-22 (up to February 2022) over 2020-21 (up to February 2021) has been 14.09% with major rise accounted in all sub sectors –
    • Alkali chemicals – 16.8%
    • Inorganic chemicals – 7.5%
    • Organic chemicals – 3.75%
    • Pesticides & Insecticides – 19.51%
    • Dyes & Pigments – 25.6%
  • Overall growth in production of Major Petrochemicals in 2021-22 (up to February 2022) over 2020-21 (up to February 2021) has been 14.09% with major rise accounted in all sub sectors –
    • Synthetic Fibres – 31.7% 
    • Fibre Intermediates – 9.87% 
    • Polymers – 3.89% 
    • Synthetic Rubber – 9.42% 
    • Synthetic Detergent Intermediates – 7.23% 
    • Performance Plastics – 11.8% 
    • Olefins – 4.94% 
    • Aromatics – 0.76% 
    • Other Petrochemicals – 7.54%
  • The petrochemical demand is expected to grow at 7.5% CAGR from FY 2019-23, with polymer demand growing at 8%.
  • Exports of Organic & Inorganic Chemicals values at $ 2,332.92 mn in September 2022 and shares 7.15% of the total exports of the month. 
  • The Average Index of Industrial Production of Manufacturing of chemicals and chemical products in the FY 2021-22 is 120.7 and has grown by 4.1%.
  • The agrochemicals market in India is expected to grow at 8% CAGR reaching $4.7 bn by FY25.
  • The specialty chemicals constitute 22% of the total chemicals and petrochemicals market in India. The demand for specialty chemicals is expected to rise at a 12% CAGR in 2019-22.
  • The production of total Major Chemicals & Petrochemicals during April - May 2022 is 8,658 thousand MT.

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

  • Opportunity to produce $111 Bn worth of chemical products by 2023 for domestic requirements

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

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Production Linked Incentives (PLI) Scheme

Launched and approved in 2021 at a budgetary layout of INR 18100 Crore over a 5-year period. Under the scheme, the government seeks to boost local manufacturing of advanced chemistry cell to bring down prices of battery in the country, which will reduce the cost of electric vehicles as well. The scheme was designed to be technology-agnostic. The beneficiary firm were free to choose suitable advanced technology, machinery, raw materials and other intermediate goods for setting up cell manufacturing facility to cater for any application. This scheme was oversubscribed by 2.6 times (130 gwh). After final evaluation, a total of 4 companies were selected for incentives under Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage. This includes Reliance New Energy Solar Limited (5GWh Awarded and 15 GWh waitlisted); Ola Electric Mobility Private Limited (20 GWh awarded); Hyundai Global Motors Company Limited (20 GWh awarded) and Rajesh Exports Limited (5GWh awarded).

  • INR 18,100 Cr

    Scheme Outlay

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FAQs

Frequently
Asked Questions

What is PCPIR?

Government of India has approved 4 Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) in the state of Andhra Pradesh (Vishakhapatnam), Gujarat (Dahej), Odisha (Paradeep) and Tamil Nadu (Cuddalore and Naghapattinam) to promote investment and industrial development in these sectors.

The PCPIR is envisioned to reap the benefits of co-siting, networking and greater effiencies through use of common infrastructure and support services. Each PCPIR is a specifically delineated region having an area of about 250 sq. km. wherein 40% of the area has to be for processing activities.

For more information, click here

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What is Chemical Promotion Development scheme (CPDS)?

Chemical Promotion Development scheme is a government scheme with an objective of promoting and developing the chemical & petrochemical sectors by extending financial support for conduct of seminars, conferences, exhibitions, conducting studies/ consultancies, for facilitating growth, as well as analyzing critical issues affecting chemical and petrochemical sector.

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What are OCPFs?

OCPFs comprise of two different categories of organic chemicals and these are Discrete Organic Chemicals (DOCs) and PSF chemicals.  
For more details, please visit the following link. 

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What is a DOC?

Discrete organic chemical is defined as any chemical belonging to the class of chemical compounds consisting of all compounds of carbon except for its oxides, sulfides and metal carbonates, identifiable by chemical name, by structural formula, (if known) and by Chemical Abstracts Service (CAS) registry number (if assigned). For instance: Acetic Acid ,Ethanol.

For more details, please visit the following link.

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What are the objectives of the scheme for setting up of plastic parks in India?

The major objectives of the scheme are:
1) Increase the competitiveness, polymer absorption capacity and value addition in the domestic downstream plastic processing industry through adaptation of modern, research and development led measurers.
2) Increase investments in the sector through additions in capacity and production, creating quality infrastructure and other facilitation to ensure value addition and increase in exports.
3) Achieve environmentally sustainable growth through innovative methods of waste management, recycling, etc.
4) Adopt a cluster development approach to achieve the above objectives owing to its benefits arising due to optimization of resources and economies of scale.

For more details, please visit the following link. 

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