The Indian chemical industry, the 6th-largest chemical manufacturer globally and 3rd largest in Asia, is poised to grow at a CAGR of 11-12% till 2027, as per a knowledge paper announced by ASSOCHAM and PwC India at the ‘India Specialty Chemicals Conclave 2025’ held currently in New Delhi.
The report emphasize the sector’s dynamism and capability to establish as a sustainable international hub, with the speciality chemicals phase, constituting 22% of the $220-bn chemical and petrochemical marketplace in 2023, becoming a cornerstone of economic progress.
As per the report, India’s share in the global speciality chemicals marketplace could increase from 3% recently to 4% with the aid of 2027. With speciality chemicals ac counting for extra than 50% of general chemical exports from India, Indian speciality chemicals enterprises are increasing their capacities to sustain the growing demand from both domestic and international markets.
Among the speciality chemicals sub-segments, India has emerged as the 2nd largest exporter for agrochemicals in the world, with exports worth $5.4-bn in FY 2022-23. The dyes and pigments section also excels, contributing near 18% of global dye stuff exports, with FY 2023-24 exports worth Rs. 5,831-crore for pigment emulsions and Rs. 4,634-crore for dyes.
Despite strong increase, the industry faces demanding situations, inclusive of excessive import dependency, with raw material costs including 40% to 60% of total prices because of reliance on imported petrochemical intermediates like ethylene and propylene. Supply chain disruptions, charge volatility, and a talent short age pose hurdles. To position India as a sustainable worldwide chemical hub, the file emphasizes three key enablers:
- An adaptive international trade strategy: The Indian chemical industry needs to leverage the 13 free trade agreements (FTAs) signed in the last 5 years to improve marketplace access and mitigate trade risks. And also explore rerouting of chemicals trade flows through new agreements with EU and US which can be at the anvil. The Remission of Duties and Taxes on Exported Products (RoD TEP) scheme and Special Economic Zones (SEZs) supplying tax exemptions on raw materials have strengthened price competitiveness. How ever, latest US reciprocal tariffs of 26% on Indian exports spotlight the need for agile trade policy reforms to maintain global competitiveness.
- Building overall performance excellence: via digital transformation is a pivotal enabler for Indian chemical industry. Over 52% of supply chain leaders view digitalization as essential, with technologies like virtual twins and AI-driven procurement optimizing operations. While a enormous percentage of Indian CEOs are constructive about Generative AI’s effect on enterprise profits, trust in the technology stays a challenge.
- Collaboration for innovation and skill development: is the next vital enabler for sustainable, long time increase, as Indian chemical industry needs to come together to cope with rising talent hole and foster innovation for both new product development and process enhancements to scale-up. Institutionalizing enterprise-academia partnerships, supported with the aid of non-profit regional generation switch organization, would be key to facilitating R&D and technology commercialization.
