Chemicals Industry And Exports in India

Total chemical exports from India stood at US$ 23.78 billion in FY23.

Source: Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council, Department of Industrial Policy and Promotion.

Last updated: Nov, 2023

Introduction

India is the sixth-largest chemical-producing country in the world and the third-largest producer in Asia. It is also among the top three basic chemical-producing countries globally. The chemicals and petrochemicals market in the country is worth US$ 178 billion and is expected to reach US$ 300 billion by 2025. The industry employs around two million people in India. The country ranks 14th in the global exports of chemicals (excluding pharmaceutical products) with a 2.5% contribution to global chemical sales. The Indian chemical industry employs over two million people and makes up 3.4% of the global chemical industry. Chemical manufacturing in India is mainly concentrated in Maharashtra and Gujarat. The other major producing states are West Bengal and Tamil Nadu.

The chemicals industry in India is highly diversified, covering over 80,000 commercial products. It is broadly classified into bulk chemicals, agrochemicals, speciality chemicals, polymers, petrochemicals, and fertilizers. India’s chemical industry is the fourth largest producer of agrochemicals and is manufacturing more than 50% of technical-grade pesticides. The industry is the third largest consumer of polymers in the world and is known as a key global dye supplier with exports to over 90 countries, accounting for approximately 16% of the global production of dyestuff and dye intermediates.

Export Trend

Chemicals Industry And Exports in India | IBEF (2)

India is among the top chemical exporting countries in the world. India exports inorganic and organic chemicals, tanning and dyes, agrochemicals, plastics, synthetic rubber, filaments, etc. In FY23, exports of major chemicals and petrochemical products stood at US$ 23.8 billion. The surge in chemical exports has been achieved because of sustained efforts on the part of the Department of Commerce & Industry and Indian member exporters. CHEMEXCIL, India’s chemical exports promotion council, has also made major efforts by using grants in aid under the market access initiative scheme, organizing B2B exhibitions in different countries, exploring new potential markets through product-specific marketing campaigns with the active involvement of Indian embassies, providing financial aid in statutory compliance in overseas product registration, etc. This export growth has been achieved despite issues like high freight rates and container shortages which has benefitted small and medium exporters from key states like Gujarat, Maharashtra, Karnataka, Tamil Nadu, and Andhra Pradesh.

In FY24 (Until August 2023), the exports of major chemicals and petrochemicals stood at US$ 8.4 billion. In FY22, India’s total chemical products exports were valued at US$ 24.31 billion, an increase of 38.67% YoY. The export growth of chemicals has been achieved because of a surge in shipments of organic, and inorganic chemicals, agrochemicals, dyes and dye intermediates and speciality chemicals.

Export Destinations

India exports chemicals and chemical products to more than 175 countries with key export destinations like China, USA, Brazil, Netherlands, Saudi Arabia, Indonesia, UAE, Japan, Germany, etc. The industry also started exporting to markets like Turkey, Russia, and Northeast Asian countries namely Hong Kong, Japan, Korea RP, Taiwan, Macao, and Mongolia. During 2022-23, the USA was the largest importer of chemicals from India valued at US$ 3.85 billion, followed by Brazil with imports of US$ 1.82 billion. Chemical exports to China were valued at US$ 1.74 billion in 2022-23.

China is a major importer of dye intermediates and castor oils from India. The USA remained the largest importer of dyes, inorganic chemicals, organic chemicals, agrochemicals, and essential oils from India.

As per 2022-23 (provisional data) export statistics provided by CHEMEXCIL, the USA exports were valued at US$ 3.85 billion recording a growth of 8% over 2021-22. This was followed by Brazil (6%) and China (-31%).

Government Initiatives

PCPIR Policy 2020-35

Under the new PCPIR Policy 2020-2035, a combined investment of US$ 142 billion is targeted by 2025, US$ 213 billion by 2030 and US$ 284 billion by 2035 in all PCPIRs across the country. The four PCPIRs are expected to generate employment for ~33.83 lakh people. About 3.50 lakh people were employed in direct and indirect activities related to PCPIRs by the end of 2020.

Chemical Promotion and Development Scheme (CPDS)

The primary objective of the CPDS is to facilitate growth in the chemical and petrochemical industry with knowledge dissemination through studies, surveys, data banks and promotional materials. The three main components of the scheme are knowledge product creation, knowledge dissemination and excellence awards for research and innovation.

Apart from the various schemes mentioned above, the Government of India has introduced several research entities, schemes and councils to develop skilled manpower in the industry aimed at increasing the manufacturing competitiveness of India in the global market. This effort included providing a grant in aid to educational institutes for setting up the Centre of Excellence (CoE) to improve existing petrochemical technology and promote the development of new applications of polymers. The government has also made budgetary allocations towards the Central Institute of Plastic Engineering and Technology (CIPET) to strengthen the research & development capabilities, technical infrastructure and implemented training initiatives.

Government Body

Basic Chemicals, Cosmetics and Dyes Export Promotion Council (CHEMEXIL)

Found in 1962 by the Government of India, the primary objective of the CHEMEXCIL is to promote chemical product exports abroad. The important roles of the council are to be an interface between the industry and government, participate in international exhibitions, advise the government on policies, provide training and knowledge transfer to industries, etc.