What’s the Market Scenario of Chemical Industries in India?


Most people consider Chemical Industry as the backbone for India’s agricultural and industrial development. Being one of the most diversified industrial sectors, chemical covers an array of more than 700,00 commercial products. The Indian economy has garnered appreciation with the chemical industry’s role in products such as perfumes, pharmaceuticals, fertilizers, varnishes, paints, petrochemicals, glass, toiletries, etc.

Let’s go through some numbers as well:

Globally, India is the 7th largest producer of chemicals and 3rd largest (by volume) in Asia.

India ranks 3rd in producing agrochemicals globally.

It also contributes approximately 16% to global production of dye intermediaries and dyestuff.

The petrochemical market in India is estimated to reach $100 billion by 2022. However, some survey projects it to reach $304 billion by 2025.

The Indian chemical industry affects more than 2 million lives.

India is the 4th largest producer of pesticides.

Predictions are that the demand for chemical products will grow by approximately 9% per annum over the next five years.

Potential for growth in the Chemical Industry

The companies operating in the chemical industry consists of two major units; small-scale and large units (including MNCs). Together, these industries produce thousands of chemical products and byproducts which range from petrochemicals to cosmetics and also plastic to toiletries.

According to the overall index of Industrial Production (IIP), the industry has a weightage of 14 percent, which signifies the role it plays in growing the nation’s economy. Indian advantage lies in the production of necessary chemicals that are also referred to as commodity chemicals. As in the entire domestic chemical sector, they account for approximately 57%. 

The primary growth sector in the Indian chemical industry is pesticides, petrochemicals, specialty chemicals, pharmaceuticals, and Chlor alkali. There exist a vast application of petrochemical products produced from polymers, synthetic fibers, polymers, and fiber intermediaries in the industrial and domestic sectors.

Note: Chemical industries in India themselves consume around one-third of their production.

Structure of Chemical Industry in India

The classification of chemicals produced can be broadly done into two segments; Inorganic and Organic chemicals. Inorganic chemicals comprise dyes, dyestuffs, and alkalis. Whereas, organic chemicals cover most of the chemical compounds such as cosmetics, petrochemicals, agrochemicals, drugs, etc.

Exports & Chemical Industry in India

Complete exports of all the dye intermediaries, dyes, organic or inorganic chemicals, including castor oil, cosmetics, and toiletries, incense sticks, agrochemicals, essential oils, stood at the US $26 Billion in 2018-19.

Countries such as Saudi Arabia, the UK, the US, UAE, and Bangladesh are amongst the leading importers of chemical products such as toiletries, cosmetics, and essential oils.

With so many modifications in the political and industrial front and enormous scope in exporting; chemical companies in India must embrace themselves to grow in the coming years.

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