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FDI in Chemical Industry in India

The chemical industry in India is an indispensable part of the economy of the country, for it constitutes around 6% of the country's GDP. Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into Basic chemicals, Specialty chemicals, and Agrochemicals.

The Indian chemicals industry is projected to reach $304 bn by 2025. 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.

100% FDI Chemical Industry In India is allowed under the automatic route (except in the case of certain hazardous chemicals).

 

 

  • 1

    3rd largest consumers of polymers in the world

  • 2

    4th largest producer of agrochemicals in the world

  • 3

    6th largest producer of chemicals in the world

Market size of the Chemicals industry in India stood at $163 bn in 2017-2018

Total production of chemicals and petrochemicals stood at 47,882,000 MT during 2017-18, a 2.62% increase over 2016-17

Alkali chemicals had the largest share in the Chemical industry in India with approximately 69% share in the total production. Production of polymers account for around 59% of total production of basic major petrochemicals

The petrochemical market in India is expected to grow at a CAGR of 10% over the next 5 years to reach $100 bn by 2022

The Indian colorant industry, valued at USD 6.8 bn, exports nearly 75% of its production

  • Robust demand

    Large population base coupled with strong export demand
  • Policy support

    Setting up PCPIRs, plastic parks and CIPETs
  • Chemicals manufacturing hub

    The global shift towards Asia as the world’s chemicals manufacturing hub
  • New focus segments

    Specialty and Knowledge chemicals
  • Cost competitive manufacturing

    Boost air connectivity to smaller cities & northeastern statesSkilled manpower, world-class engineering, and strong R&D
  1. May 2019: Netherlands - based Royal DSM's Indian branch DSM Material has acquired the Engineering Plastics business from Gurugram - based chemicals firm SRF Ltd for Rs.3,200 crores. DSM will use this acquisition to further strengthen its position as a leading player in engineering plastics in India.
  2. Jul 2018: Toray Industries (India), a subsidiary of the Japanese major Toray Industries will invest Rs.1000 crore to set up a plant for manufacturing chemicals used as advanced raw materials in Sri City, Andhra Pradesh.
  3. Mar 2018: Himadri Speciality Chemical Ltd, the largest vertically integrated speciality carbon company of the country with a market capitalization of over $1 bn, is planning to invest $153 mn to expand its Carbon Black business by setting up new carbon black lines in its existing integrated plant in Mahistikry, West Bengal for producing Specialty Carbon Black.
  4. Jan 2017: Hindustan Petroleum Corporation Ltd (HPCL), Gail India Limited (GAIL) and Government of Andhra Pradesh, have signed a Memorandum of Understanding (MoU) for setting up a green-field, standalone petrochemical complex in Andhra Pradesh. The proposed complex, which will be spread in 2000 acres of GMR’s Kakinada SEZ, is expected to involve an investment of $6.1 bn.

  • $16.6 bn FDI inflows to chemicals (in USD) during April 2000 – March 2019
  • 2X Growth in FDI equity inflows (FY 2014 to FY 2016)
  • As per FDI policy for chemical sector, 100% FDI is allowed under the automatic route in the chemicals sector

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