The Indian Chemical Industry aims to double its share in global chemical industry to 5%-6% by 2021. Growing at 9%, the industry has enormous growth potential. India is one of the top five producers of agrochemicals, polymers and plastics, dyes and various organic and inorganic chemicals in the world. The Indian Chemical Industry has evolved from a producer and supplier of basic chemicals in a highly regulated domestic market to a diverse industry in an open economy.
The industry currently employing nearly 2 million people is still in need for more skill development initiatives. The Government plans to set up five Central Institutes of Chemical Engineering and Technology (CICET) to enhance technology support to the industry, promote R&D and meet manpower needs. The process for preparation of the concept note and feasibility study for establishing CICET has been initiated. Additionally, the Government also plans to set up chemical and petrochemical hubs around 22 refineries across the country. The R&D spending of chemical industry is estimated to increase to around $12 billion by 2017.
Bio-chemicals are trending – owing to increasing awareness among consumers & rising environmental regulations, the demand for bio-based chemical products is expected to increase. The industry realises the need for environment friendly chemicals and many collaborations and investments are been made. Institute of Chemical Technology (ICT) has also signed technology transfer MoUs with BPC Land HPCL for setting up of 2G biomass ethanol bio-refineries in Madhya Pradesh and Punjab respectively. Basmati rice producer, KRBL Ltd, has set up a furfuryl alcohol plant in Punjab manufactured from furfuryl oil – a by-product during the processing of rice.
The country is also strongly focusing on technology development for reducing the environment impact of chemical manufacturing. This is evident as a chemical plant in India becomes the world’s first large-scale unsubsidized CO2 conversion unit that converts carbon emissions from the chemical manufacturing process into baking soda – reducing up to 60,000 tons of CO2 atmospheric emissions every year. Dyes and dye intermediates is the second highest export segment in the Chemical Industry and accounts to 15% of global production. The Indian Institute of Technology Gandhinagar (IITGN) is establishing a Common Research and Technology Development Hub (CRTDH) on Chemical Processes to help dye-industries meet the pollution norms by improving existing chemical processes and waste treatment.
The Union Budget 2017-2018 released on 1st February, 2017 seems promising for the industry and has rectified inverted duty in several products in the chemicals & petrochemicals space. Union Minister for Chemicals & Fertilizers Ananth Kumar observed that the current PCPIR (Petroleum, Chemicals & Petrochemicals Investment Regions) Policy needs fine tuning to make it more pragmatic and practical and has invited suggestions from industry leaders and experts.
The Indian agro-chemical market worth around $4.3 billion is the fourth largest globally. Expected to grow at 12%-13%, will reach around $7.5 billion in 2019. The specialty chemicals market has been growing at 14% over the last five years and is projected to reach $70 billion by 2020. The petrochemical sector growing at 13% is estimated to reach $100 billion by the end of 2020. Driven by low cost labour, raw material availability, large consumer markets and technology adaptability, MNCs are looking at India as a chemical manufacturing hub.
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