Indian Chemical Industry Analysis Report
As per an industry report on chemicals, alkali chemicals have the largest share with the total production bring 73.1% from April till September 2022. Except for a few dangerous chemicals, India’s chemical industry is de-licensed.
India is the 3rd largest contributor in Asia of chemicals while in world, it is the 6th largest manufacturer of chemicals. The chemical industry is likely to contribute towards India’s GDP about USD 383bn by the year 2030.
The chemical sector of India is estimated to be about USD220bn in 2022 while it is forecasted to be USD300bn by 2025 and USD 1trn by 2040.
At a world level and except for pharmaceuticals, India holds a strong position in imports and exports of chemicals and is 8th in imports while is 14th in exports. The Indian industry of chemicals covers more than 80,000 commercial products with a complete market size of USD232.66bn in 2021-22. While the industry is likely to grow at a rate of 9.3% by 2025 to reach USD304bn in the wake of increasing demands in the end-user segments of petrochemicals and specialty chemicals. The sector is likely to reach USD40bn by 2025.
As per a CRISIL report, the manufacturers in India have recorded a CAGR of 11% in revenue between FY15 and FY21, thereby increasing a share of India in the global specialty chemicals market from 3% to 4%.
The growth in revenue is likely to be year-on-year 19% to 20% in FY22, a rise from FY2021 of 9 to 10%, driven through a recovery in domestic demand and increased realisations because of increasing crude oil prices and good exports.
The country’s dye exports were USD23.78bn in the months of April and March 2022-2023.
As per a CRISIL report, the market of specialty chemicals in India is likely to increase quicker than China thereby, increasing its share in market by 2026 to 6% from 3-4% in FY2021.
As a result of the resurgence in domestic end-user demand and China’s +1 strategy, a shift in the global supply chain has been brought forward that will fuel remarkable growth in revenue in 2022 of 18-20% and in 2023, of 14% to 15%.
While in February 2023, the production of chemicals reached 874.30mn metric tonnes or MMT, the petrochemical production reached 1,773.74 MMT.
The production levels of various chemicals are:
- Soda Ash – 250.87 MMT
- Caustic Soda – 269.17 MMT
- Liquid Chlorine – 201.48 MMT
- Formaldehyde – 19.13 MT
- Insecticides & pesticides– 17.01 MMT
While insecticides share 53% of the whole local agrochemicals market, which is followed by Herbicides. The key revenue component of India are the agrochemicals that exports 50% of the total chemical production.
The consumption of petrochemicals was at 22mn tonnes in 2019-2020 of which 16.5mn tonnes were polymer products. India’s export of agrochemicals was USD5.37bn provisionally from April 2022 till March 2023.
As a result of COVID-19, a declining demand was witnessed in India but now on it is estimated to grow to 32mn tonnes from 2020 to 2030.
While India is a key player in the world market exporting to more than 90 countries in the segment of pharmaceuticals, dyes and agrochemicals, the country is a global supplier for dyes accounting to 16% of the global production of dyestuffs and dye intermediaries.
India’s exports of dye amounted USD23.78bn from April 2022 to March 2023. The country exports dyes to countries such as Japan, Singapore, Turkey, Spain, Switzerland, the US, the UK and Germany.
Moreso, the Indian market of dyes is forecasted to reach USD63bn by the year 2022.
The small and medium enterprises of the local chemical sector is likely to depict revenue growth in FY2022 of 18-23% as a result of high returns due to high price of chemicals and an improvement in local demand. The demand domestically while grew to USD170bn – USD180bn in 2021, by 2040 it is likely to grow to USD850bn – USD1000bn.
The domestic chemicals sector’s small and medium enterprises are expected to showcase 18-23% revenue growth in FY22, owing to an improvement in domestic demand and higher realisation due to high prices of chemicals. Domestic demand is expected to rise from US$ 170 billion-US$ 180 billion in 2021 to US$ 850 billion-US$ 1,000 billion by 2040.
