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Chemicals Industry

Chemical Industry and Export In India

India is the sixth largest chemical producing countries in the world and third largest producer in Asia. It is also among the top 3 basic chemical producing countries globally. The chemicals and petrochemicals market in the country is worth US$ 178 billion and is expected to reach US$ 300 billion by 2025. The industry employs around 2 million people in India. The country ranks 14th in the global exports of chemicals (excluding pharmaceutical products) with 2.5% contribution to global chemical sales. Chemical manufacturing in India is mainly concentrated in Maharashtra and Gujarat. The other major producing states are West Bengal and Tamil Nadu.
Chemicals industry in India is highly diversified, covering over 80,000 commercial products. It is broadly classified into bulk chemicals, agrochemicals, specialty chemicals, polymers, petrochemicals and fertilizers. India’s chemical industry is the fourth largest producer of agrochemicals and manufacturing more than 50% technical grade pesticides. The industry is the third largest consumer of polymers in the world and known as a key global dye supplier with exports to over 90 countries, accounting for approximately 16% of the global production of dyestuff and dye intermediates.
India has de-licensed chemicals industry except for few hazardous chemicals. The Government’s investment plan to set up petroleum, chemicals and petrochemicals investment regions (PCPIRs) and plastic parks will be providing state-of-the-art infrastructure to boost the industry output and grow employment generation from the sector.
India is among the top chemical exporting countries in the world. India exports inorganic and organic chemicals, tanning and dyes, agrochemicals, plastics, synthetic rubber, filaments, etc. In FY 2022-23 (until August 2022), exports of chemicals and petroleum products stood at US$ 8.24 billion. The surge in chemical exports has been achieved because of sustained efforts on the part of the Department of Commerce & Industry and Indian member exporters. CHEMEXCIL, India’s chemical exports promotion council, has also taken major efforts by using grant in aid under market access initiative scheme, organizing B2B exhibitions in different countries, exploring new potential markets through product-specific marketing campaigns with the active involvement of Indian embassies, providing financial aid in statutory compliance in overseas product registration, etc. This export growth has been achieved despite issues like high freight rates and container shortages which has benefitted small and medium exporters from key states like Gujarat, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh.
In FY 2021-22, India’s total chemicals products exports were valued at US$ 24,313.88 million, an increase of 38.67% YoY. The export growth of chemicals has been achieved because of a surge in shipments of organic, inorganic chemicals, agrochemicals, dyes and dye intermediates and specialty chemicals. In September 2022, the organic and inorganic chemical exports of the country were valued at US$ 2,332.92 million.
India exports chemicals and chemical products to more than 175 countries with key export destinations like China, USA, Brazil, Netherlands, Saudi Arabia, Indonesia, UAE, Japan, Germany, etc. The industry also started exporting to markets like Turkey, Russia and Northeast Asian countries namely Hong Kong, Japan, Korea RP, Taiwan, Macao, Mongolia. During 2020-21, China was the largest importer of chemicals from India valued at US$ 2.4 billion followed by USA with imports of US$ 2.2 billion. Chemical exports to Brazil were valued at US$ 1.3 billion recording growth of 31% from US$ 1.0 billion witnessed in 2019-2020.
China is a major importer of dyes, dye intermediates and organic chemicals from India. USA remained the largest importer of essential oils, inorganic chemicals while Brazil was the top importer of agrochemicals from India. India’s Cosmetics, Soap & Toiletries exports to USA were the highest among all the key export destinations from India.
As per 2021-22 (provisional data) export statistics provided by CHEMEXCIL, top 25 countries have recorded growth for Indian chemical exports over 2020-21 period. USA exports valued at US$ 3.6 billion recording a growth of 59% over 2020-21. This export growth has driven USA contribution to the overall chemical exports from India to the highest levels at 17.73 % followed by China (12.7%) and Brazil (8.52%).
PCPIR Policy 2020-35
Under the new PCPIR Policy 2020-35, a combined investment of US$ 142 billion is targeted by 2025, US$ 213 billion by 2030 and US$ 284 billion by 2035 in all PCPIRs across the country. The four PCPIRs are expected to generate employment for ~33.83 lakh people. About 3.50 lakh people have been employed in direct and indirect activities related to PCPIRs by the end of 2020.
Chemical Promotion and Development Scheme (CPDS)
The primary objective of the CPDS is to facilitate growth in the chemical and petrochemical industry with knowledge dissemination through studies, surveys, data banks and promotional materials. The three main components of the scheme are knowledge product creation, knowledge dissemination and excellence awards for research and innovation.
Apart from the various schemes mentioned above, the Government of India has introduced several research entities, schemes and councils to develop skilled manpower in the industry aimed at increasing manufacturing competitiveness of India in the global market. This effort included providing grant in aid to educational institutes for setting up Center of Excellence (CoE) with a view to improve existing petrochemical technology and promote development of new applications of polymers. The government has also made budgetary allocations towards Central Institute of Plastic Engineering and Technology (CIPET) to strengthen the research & development capabilities, technical infrastructure and implemented training initiatives.
Basic Chemicals, Cosmetics and Dyes Export Promotion council (CHEMEXIL)
Found in 1962 by the Government of India, the primary objective of the CHEMEXIL is to promote chemical product exports abroad. The important roles of the council are to be an interface between the industry and government, participate in international exhibitions, advise the government on policies, provide training and knowledge transfer to industries, etc.

Source: India Brand Equity Foundation

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