Overview of the Indian Chemical Industry

It is anticipated that the chemical industry will register a CAGR of 9.3% and reach USD 304 billion by 2025, making it a lucrative opportunity for foreign investors to establish their ventures and scale heights.

The Indian Chemical Industry is assumed to contribute USD 300 billion to the country’s GDP.

Indian Speciallity Chemicals industry is gradually emerging as a notable manufacturing hub for both contract and custom synthesis of specialty chemicals, driving equal revenue from both domestic sales and exports.

Over the years, this sector has evolved from a supplier of natural extracts to meet the varied requirement in the global market. The remarkable boom of this specialty Indian Chemical Industry is a crucial driver for foreign investment. And this is where chemical industry consultants in India come to the forefront, helping foreign investors explore the Indian chemical industry segment

Indian Speciality Chemicals Market Size and Key Recent Trends

The Indian Speciality chemicals market is enormous and is witnessing significant growth. The Indian Speciality Chemicals industry is anticipated to escalate by 11% to 12% and reach an estimated USD 64 billion by 2025. Here are some glimpses of investments and recent developments in the chemical sector:

• Per statistics, the exports of organic and inorganic chemicals increased by 38.67% and reached USD 24,313.88 million on March 2022.
• The chemical production has escalated by 918,629 MT and the petrochemical production has also enhanced by 1,564,215 MT.

The NTPC Renewable Energy Limited and Gujarat Alkalies and Chemicals Limited (GACL) have signed an MOU to collaborate establishment of India’s first-ever commercial-scale Green Ammonia and Green Methanol plants.

Government Policies Related to the Indian Speciality Chemicals Industry

The Government of India has implemented various initiatives to curb the production of subpar chemicals in the country. Here are some of the notable initiatives:

• As per the recent FDI policy support, the Government of India has granted 100% FDI under the automatic route in the chemical industry. However, it is not applicable to hazardous chemicals. This policy proves ideal for foreign companies seeking to acquire the Greenfield setup in India.
• The Indian Government has planned to launch PLI or Production linked scheme in this sector to uplift domestic manufacturing and exports. In addition, PLI schemes will stimulate Bulk Drug Parks.
• The National Chemical policy was implemented, helping the chemical sectors to escalate and become more competitive. The vision behind incorporating the policy is to enhance the chemical sector’s share in GOP by 6%.

The Government has set up a plan as the 2034 vision, intending to explore opportunities in the Speciality Chemicals industry, enhance domestic production, lower imports, and lay a breeding ground for investors. Moreover, the Government also aspires to integrate a production-link incentive system and create a robust manufacturing ecosystem.

How can India Benefit from the Global Chemical Product Market’s Supply and Demand Chain?

There are several ways in which India benefits from the global chemical product market’s supply and demand chain:

• Increasing Investments

A total investment of USD 107.38 billion is evaluated in various chemical sectors, leading to India having an unsurpassable export presence. It attracts foreign investors and M&A activities. It has a robust workforce, colossal human resources, and low-cost manufacturing potential, making it the most favorable manufacturing destination for foreign investors. Foreign investors are willing to make their entry into the Indian market through the M&A channel and set up their manufacturing plants via lump sum investments.

• Strengthening Economy

India’s Chemical industry leads to the country’s robust economy. Even when the Indian economy was disrupted from 2016 to 2019, the chemical industry maintained a decent CAGR percentage owing to its production and demand.

• Growing Domestic Demands

The Indian chemical industry provides raw materials to several end-user industries like personal care, food processing, etc. The steady growth of the chemical industry also leads to the development of various segments of the specialty chemicals market of India.

Increasing FDI Inflows in the Indian Chemical Industry with the Help of Consulting Firms

1. Market Insights and Strategy: Consulting firms conduct detailed market analyses, offering a deep understanding of trends, competition, and growth opportunities for foreign investors.
2. Regulatory Compliance: Consulting firms guide foreign investors through the regulatory landscape, ensuring compliance with local and international standards to streamline market entry.
3. Customized Market Strategies: Consultants offer India-specific strategies, such as Greenfield project management and M&A support, ensuring smooth entry and sustainable growth.
4. Partner Search & Retention: Consulting firms assist in identifying and securing reliable local partners, facilitating strong business relationships and ensuring long-term success.
5. Expansion and Growth Advisory: Providing growth-focused strategies, consultants help investors scale their operations effectively, positioning them for continued success in the competitive Indian market.
6. Hassle-Free Setup: Consultants assist in managing all aspects of setting up manufacturing plants, from legal and regulatory approvals to operational planning.

How Tecnova Supports FDI in the Indian Chemical Industry

1. Comprehensive Market Analysis: Tecnova offers detailed market research, providing foreign investors with insights into key trends, competitors, and opportunities in the Indian chemical sector.
2. Regulatory and Compliance Assistance: Tecnova ensures that foreign investors meet all regulatory requirements, facilitating smooth entry into the Indian market.
3. India-Specific Strategies: Tecnova helps design tailored strategies, including Greenfield projects, mergers & acquisitions (M&A), and company incorporation, to ensure successful market penetration.
4. Partner Identification & Retention: Tecnova assists in identifying reliable local partners and ensures effective partnerships for long-term growth.
5. Expansion & Growth Support: Tecnova provides guidance on scaling operations, ensuring businesses can expand efficiently within India’s dynamic chemical sector.
6. Seamless Manufacturing Setup: Tecnova offers end-to-end support for manufacturing plant setup, handling legal, regulatory, and operational aspects for a hassle-free establishment.

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‍Reference

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