Chemical Industries in India have a vital role, and the economy covers over 80,000 commercial products. There is extreme diversification in the chemical industry in India. It broadly features in agrochemicals, specialty chemicals, bulk chemicals, polymers, petrochemicals, and fertilizers.

Chemical Industry Global Position

India ranks fourth position in agrochemicals. It comes after the US, Japan, and China. It accounts for the dye intermediates and dyestuffs world production. The industry of Indian colorants industry has around 15% global market share. The chemicals industry has a strong position in chemicals imports and exports, ranking 8t and 14th at the global level.

In FY22, the chemical, small and medium domestic sectors expect 18-24% revenue. The improvement is due to the chemical's high prices and domestic demand increase. The proximity of India to the Middle East, the petrochemicals feedstock source, enables benefiting the scale of economies.

Recent developments and investments

Chemical manufacturing has come up with new developments and investments showing the growth of the Indian chemical sector. They are:

  • Increase of organic and inorganic chemicals export is 38.67% from April 2021 - March 2022, reaching US$ 24,313.88 million.
  • In June 2022, chemical production is 920,628 MT, petrochemical production is 1,711, 281 MT. The other chemicals production levels are as Liquid Chlorine: 202,467 MT, Pesticides and Insecticides: 18,327 MT, Caustic Soda: 281,778 MT, Soda Ash: 274,597 MT, and Formaldehyde: 24,998 MT.
  • IOCL, in Nov 2021, plans to invest Rs 3681 crore to set up the first mega-scale in India of maleic anhydride for high-value manufacturing specialty chemicals in Haryana at its Panipat Refinery.
  • Indian Oil Corporation and Praj Industries Ltd November 2021, came into a MoU (memorandum of understanding) to explore the production opportunities of alcohol-to-jet fuels, compressed bio-gas, ethanol 1&2G, and related biofuels industry opportunities.
  • Mr. Narendra Modi, the Prime Minister, on September 30, 2021, inaugurated at Jaipur the Institute of Petrochemicals Technology.
  • BPCL (Bharat Petroleum, Corporation), in September 2021, announced an investment of US$4.05 billion to refine efficiencies and promote petrochemical capacity.
  • Rosneft, Russia, in October 2021, launched a petrochemical large-scale production program for development in India with ~US$ 750 million worth of investments at the implemented current stage.
  • Nayara Energy, in October 2021, expects around 15-20 new petrochemical-integrated plants within the next decade to become operational. It wishes to fulfill the clothing and plastic industries' raw materials rising demand.
  • Coromandel International, in November 2021, announces the setting up of a sulphuric acid plant of 1650 MT/day in the Vishakhapatnam fertilizer complex with Rs. 400 crore investments.
  • NTPC Renewable Energy Ltd signed an MoU with Gujarat Alkalies and Chemicals Ltd in July 2022 to establish the participation of the commercial-scale of Green Methanol and Ammonia plants for the first time in India.

The market size of the Indian chemical industry

The chemical industry in India in 2019 was at US$178 billion, and the expectation by 2025 is to reach around US$304 billion. It means registering a 9.3% CAGR. The chemical demand is also anticipation by 2025 is around 9% per annum. The Indian chemical industry in 2025 will contribute to a GDP of around US$300 billion.
 
The Indian chemicals and petrochemicals estimate by 2025 Rs. 8 lakh crore investments. The chemicals specialty constitutes 22% of petrochemicals and total chemicals, and the specialty chemicals demand is in anticipation to rise at a CAGR of 13% in 2019-2022.
 
India’s share increased from 3 percent in 2015 in the global specialty chemicals market to 4 percent in 2019. The anticipation by 2025 is to reach 5.5 percent.

The road ahead, the future

The pandemic situation has opened numerous opportunities for the Indian chemical industry. It is because of the disruption of the supply chain in China and the conflict of trade between Europe, the US, and China. There will be new opportunities in specific segments for the chemicals manufacturing Industry to create in China anti-pollution measures.

India’s chemical industry is diversified and de-licensed. It is classified into bulk chemicals, specialty chemicals, polymers, fertilizers, petrochemicals, and agrochemicals. The product offerings encompass over 80000 commercial products. India ranks the fourth position and accounts for 16% approximately for the dyes and dye intermediaries global production.
 
After the pandemic, the basic chemicals record high sales, showing sustaining chances. The supply chain is improving with better availability. Chances are more to see a shift in the multinational's focus to take India as a reliable alternative in comparison to China. Thus, they can prevent further supply disruptions. 
 
The global press reports state the US will stop export sanctions and investment in Chinese companies. It means India is likely to benefit, and the revival in domestic demand will bring a 50% increase. The chemicals manufacturers' Capex, as per a CRISIL report is to reach around Rs 6000 to 6200 crore in FY22, which is nearly USD 815 to 842 million