CHEMICALS

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).

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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

India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates.

Demand for organic chemicals is expected to grow at 9% CAGR from FY19-23, with phenol demand growing at 11%

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

Jan 31, 2020: Germany headquartered SCHOTT AG, international speciality glass and technical ceramic materials manufacturer increases sales in India and plans record investments.
Jul 28, 2019: Tata Chemicals will expand its soda ash production facility in Dwarka, Gujarat at an estimated cost of over INR 1000 crores, increasing its output from 10.9 lakh tonne per annum to 113.16 lakh tonne per annum.
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.

17.4 bn FDI inflows April 2000 to December 2019
2X Growth in FDI equity inflows (FY 2014 to FY 2016)
As per FDI policy for the chemical sector, 100% FDI is allowed under the automatic route in the chemicals sector