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.

How can the FDI Inflow in the Indian Chemical Industry increase with the help of Chemical Industry Consulting Firms?

Despite the pandemic situation, the Indian specialty chemical sector has multiple scopes, enabling foreign investors to materialize their business plans in this sector.

With time the specialty chemical sector in India is becoming more competitive. It is perhaps one of the oldest business domains and hence attracts foreign investors’ interest. However, in order to establish itself in this sector and make a strong business presence, foreign investors must be well acquainted with the legal and registration requirement.

The effective way to enter in Indian Chemical Industry without facing any hindrances is to take the assistance of trustworthy Chemical Industry Consultants in India like Tecnova Global. Top industrial plan set-up consultants help conduct in-depth market analysis. Moreover, foreign investors will get detailed insights into 360-degree competitive assessment and regulatory compliance. The consultant firm also offers expansion and growth advisory and aids in partner search and retention rollout. Such firms help foreign investors with India-specific market strategies, like Greenfield project management, M&A support, company incorporation, and regulatory compliances, thereby helping them set up their manufacturing plants without any hassle.

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‍Reference

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