The Indian chemical industry is among the established traditional sectors of the country that play an integral role in the country’s economic development. This sector forms a part of the basic goods industry and is a critical input for industrial and agricultural development.
The Indian chemical industry is one of the oldest industries in India and has made immense contribution to the industrial and agricultural development of India. It encompasses both large and small-scale units. The fiscal incentives granted to the small-scale units in the mid-1980s provided the thrust to the growth of MSMEs in the sector. The chemical industry serves the needs of sectors such as textiles, leather, plastics, paper, printing inks and food stuffs, among others.
The chemical industry is among the most diversified industrial sectors and includes basic chemical products and its products, petrochemicals, fertilisers, paints, gases, pharmaceuticals, dyes, etc. The sector covers over 70,000 commercial products, and provides the feedstock to many downstream industries such as finished drugs, dyestuffs, paper, synthetic rubber, plastics, polyester, paints, pesticides, fertilisers and detergents. Over the years, the industry has been evolving with a shift towards product innovation, brand building and environmental friendliness. Besides, customer focus is gaining significance in the industry.
High potential for growth in chemical industry
The industry comprises both small-scale and large units (including MNCs) and produces thousands of products and byproducts ranging from plastics and petrochemicals to cosmetics and toiletries. The industry consumes a significant share (around one-third) of its own production. The industry has a 14% weightage in the overall Index of Industrial Production (IIP) which gives an indication of its importance in the country’s industrial growth. A robust chemical industry ushers in many economic and strategic benefits for the nation. Indian Chemical industry to touch USD 190 billion by end of 2016.
Ref:Indian chemical industry to touch $190 billion in next 2 years: Report
The Indian chemical sector accounts for 13-14% of total exports and 8-9% of total imports of India. In terms of volume of production, it is the twelfth-largest in the world and the third-largest in Asia. Currently, the per capita consumption of chemical products of the Indian chemical industry is one-tenth of the world average, which reflects the huge potential for further growth. The Indian advantage lies in the manufacturing of basic chemicals that are also known as commodity chemicals that account for about 57% of the total domestic chemical sector.
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