The Indian chemical industry is an integral component of the Indian economy. The
industry has key linkages with several other downstream industries such as automotive,
construction, consumer durables, engineering, food processing etc. The industry
produces and supplies more than 80000 products. The chemicals industry which includes,
(as per national Industrial Classification) basic chemicals & its products, petrochemicals,
fertilizers, paints and varnishes, gases, soaps, perfumes and toiletries is one of the most
diversified of all industrial sectors covering thousands of commercial products. The robust
growth of this sector is important for the national economy.
The Indian chemicals industry generated total revenue of about USD 108 billion in 2010
(Source: CMIE). The relevance of the chemical industry to the overall manufacturing sector
can be gauged by the fact that ‘Basic chemicals and chemical products’ account for about
14% in overall Index of Industrial Production (IIP).
In the Chemical Sector, 100 percent Foreign Direct Investment (FDI) is permissible thru
automatic route. Manufacture of most chemical products including organic / inorganic,
dyestuffs and pesticides is de-licensed. With Asia’s increasing contribution to the global
chemical industry, India emerges as one of the focus destinations for chemical companies
worldwide. There is huge unrealised potential of further growth as indicated by the
present very low per capita consumptions in the country. The domestic demand is rapidly
increasing, and is being fuelled by approx. 200 million Indian middle class consumers. The
new National Manufacturing Policy has set the target of increasing the share of
manufacturing in GDP to at least 25% by 2025 (from current 16%). These all are
indications of the days of growth for this important sector.
