NITI Aayog report flags gaps in India’s chemicals sector, outlines strategies for growth
Projections estimate India's chemical market consumption to reach $290-310 billion by fiscal 2030, requiring a 10-11% CAGR in consumption and a 14% CAGR in production to meet ambitious goals
The chemicals industry, with its mapped value chain and growing speciality exports, shows substantial potential for expansion beyond its current 8% global market share. To achieve its goal of becoming a net-zero importer by fiscal 2030, India must strategically invest in and develop its chemical sector, addressing infrastructure, regulatory, and technological hurdles while fostering innovation.
The chemicals industry, with its mapped value chain and growing speciality exports, shows substantial potential for expansion beyond its current 8% global market share. To achieve its goal of becoming a net-zero importer by fiscal 2030, India must strategically invest in and develop its chemical sector, addressing infrastructure, regulatory, and technological hurdles while fostering innovation.
The chemicals industry, with its mapped value chain and growing speciality exports, shows substantial potential for expansion beyond its current 8% global market share. To achieve its goal of becoming a net-zero importer by fiscal 2030, India must strategically invest in and develop its chemical sector, addressing infrastructure, regulatory, and technological hurdles while fostering innovation.
NITI Aayog’s recent report, Key Sectors to Position India as a Global Manufacturing Hub, explored chemicals, textiles, telecom equipment and solar photovoltaic manufacturing as priority sectors for turning India into a global manufacturing powerhouse.
Among these four key areas, the report mapped a complete value chain for chemicals, all the way from feedstock to basic chemicals and speciality chemicals. It labelled marketing and sales as a high-value final stage, where firms sell finished products such as paints, adhesives, inks, coatings and surfactants all the way to industries including automotive, construction, pharmaceuticals, and personal care.
India’s speciality chemicals exports recently grew steadily to markets such as the United States, Brazil, Bangladesh and Japan. However, the report noted that India’s share in major global import markets still remained only 8 per cent. So, there is considerable room for growth, especially when expanding marketing reach and capturing higher-margin speciality segments rather than relying on commodity chemicals.
“By fiscal 2030, India's chemicals market consumption is projected to reach $290-310 billion, accounting for 5-6 per cent of global chemical consumption. To achieve this, the country’s consumption needs to log a CAGR of 10-11 per cent and production needs to log a 14 per cent CAGR”, the report stated.
As India looks to become a net-zero importer, the nation has the task of balancing the imports of petrochemicals and inorganic chemicals with the exports of speciality chemicals amounting to $20-25 billion. To do this, the Centre needs a plan, one that “prioritises investments and interventions”, as per the report.
The country’s chemical industry is already competitive. Rising domestic consumption, recent supportive policies and strong manufacturing capabilities have all contributed to it.
However, India still needs to overcome certain challenges like infrastructure gaps, regulatory hurdles and lack of the latest technology. The comprehensive roadmap that needs to be planned has to include steps in “fostering targeted investments, enabling policy interventions and building an innovation-driven ecosystem to position India as a leader in the global chemicals value chain,” the report noted.