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Sector Overview

The Indian chemical industry is a critical part of the Indian economy. With more than 80,000 products for downstream industries like automotive, textiles, pharmaceuticals, personal care, construction & engineering, food production and processing etc.

Buoyed by favourable megatrends, the Indian Chemical industry has grown at 7.6% over the past 6 years to reach US 155 Bn in FY 2016. Indian chemical market is poised to grow @ 9.3% till 2025 with the Speciality chemicals growing with a CAGR of above 12% till 2025.

India has the potential of becoming no 4 chemicals consuming country given the huge market. But whether the demand will be met by domestic production has a question mark. That is in the context of the emerging market scenario, with the gap between supplies and demand continuously increasing in recent years and the same being catered by imports.

New investments are very few in the chemical sector, which is a matter of concern.

The sector needs global scale infrastructure, logistics, Ease of doing business and feedstock at competitive prices to be made available.

FICCI's Engagement

Issue: Speciality Chemicals is the segment to focus.
FICCI Stand: FICCI is regularly undertaking India Chem Gujarat series of events, jointly with Govt of India and Govt of Gujarat to bring focus to issues of this segment.

Issue: Lack of requisite feedstock
Ficci Stand: Review the PCPIR policy with truly functional anchor unit concept, with fixed allocation of feedstock for downstream chemical sector. Also setting up of imported propane based propylene parks besides exploring potential of coal chemicals. Reduce import duty on feedstock.

Issue: Cluster approach - At present each chemical unit has to create specialized facilities on its own.
FICCI Stand: The provision of certain common infra. Such as power/steam/water supply, effluent treatment/incineration, testing and other logistic facilities such as chemical storage tanks farms, telecom/fire fighting and rail/road connectivity will help in sharing of common cost and bring down cost of production as also facilitate environmental control which is a challenge for the sector.

Issue: Lack of Appropriate skilled manpower
FICCI Stand: Industry driven skilling is important. FICCI is facilitating sector skills council in Chemicals and Petrochemicals sector