Chemical Industry in India is the third largest producer of chemicals in Asia. The market volume of the sector is estimated at US $ 118 billion. In the financial year 2014-15, the Indian chemical industry has contributed 7% to GDP and 13% to the Indian industrial production. Increasing urbanization and per capita disposable income are resulting in a strong growth outlook for several key end-use industries. In the next five years, analysts expect a CAGR of 8%. Growth prospects remain positive. The market volume should increase to 173 billion US $ by 2018.
Indian chemical and petrochemical industry is one of the most diversified sectors covering more than 80,000 commercial products which are being exported to countries like Middle East, Korea, Japan and Singapore. With Asia’s increasing influences as a key consumption region, India emerges as one of the focus destinations for chemical companies worldwide.
This reason, for this, is the non-ending drive to create something new and better. For instance, the Council of Scientific and Industrial Research – Indian Institute of Petroleum (CSIR-IIP) has developed nano-catalysts using new energy-efficient synthesis procedures, which can be used in reactions to eliminate unnecessary by-products and energy consumption, in an economically viable manner with minimal wastes. Essar oil & gas is in the process of ramping up the production of coal-bed methane (CBM) by four times. 120 wells have already been placed on gas production and additional 142 wells have been drilled at various stages of gas production. Furthermore, India’s high density polyethylene (HDPE) market is poised for a slight surplus in 2015 with new plants coming online in two months (by August 2015), and the excess would likely be shipped out to China.
The Indian government has ambitious plans of setting up Petroleum Chemicals and Petrochemicals Investment Regions (PCPIRs) in Gujarat, Andhra Pradesh, West Bengal and Odisha to accelerate the country’s industrial growth. The PCPIR policy aims for an integrated approach to promote growth and investment in petroleum, chemicals and petrochemicals sectors through use of common infrastructure and support services. PCPIR proposals have already been approved for Andhra Pradesh, Gujarat and West Bengal.
In addition, industrial licensing has been abolished for most sub sectors except for certain hazardous chemicals. No licenses are required for production of most chemicals including organic, inorganic, dyestuff and pesticides. However, going forward, ‘Made in India’ could become the next big manufacturing growth story. The Government has also set an ambitious plan of increasing the share of manufacturing in GDP from 16% to 25% by 2022. The total FDI inflow into India in the chemicals sector was US $ 2.927 million from April 2000 to April 2011, according to the Department of Industrial Policy and Promotion (DIPP).
It has been forecasted that the industry will reach the USD 200 billion mark by 2020. India currently accounts for approximately 3% of the world’s chemical market. India is the 13th largest country in terms of ethylene capacity and proposes enhancing the refining capacity to 300 mmtpa in 2017, from the current 190 mmtpa. Indian Pesticides and agro-chemical industry was US $ 4.25 billion in size in FY’14 and is expected to grow at 12-13% to reach US $ 7.5 billion by FY’19. Fertilizer demand in India is expected to grow at 3% CAGR from FY’13 to reach 70 mn tones in FY’18, higher than the global growth rate of 12% during the same period.
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