The chemical sector plays an important role in the economy as it supplies raw materials to industries in textiles, papers, paints, soaps, detergents, pharmaceuticals, varnish, agriculture and so on. The market size of the Indian chemical industry is pegged at USD139 billion in 2016 and it is expected to grow to USD 403 billion by 2025. The sector contributes a little more than 2% to the annual GDP of the country. India’s chemical industry is the third largest in Asia and seventh largest in the world in terms of output value and volume.  Tata Chemicals Limited (TCL), Gujarat Heavy Chemicals Ltd (GHCL), Gujarat Alkalies and Chemicals Ltd (GACL), United Phosphorus Limited (UPL) are some of the leading chemical firms in India.

The industry manufactures and supplies more than 70,000 products including basic chemicals, speciality chemicals, pharmaceuticals, petrochemicals, agrochemicals and biotechnology. India’s chemical industry can also be classified based on the nature of products manufactured – such as alkali chemicals, inorganic chemicals, organic chemicals, pesticides, dyes and dyestuffs. Of these, alkali chemicals account for around 69% of the total production in the industry. Alkali chemicals include soda ash, caustic soda and liquid chlorine.

 The sector also contributes to the foreign exchange earnings in the country through exports. India’s chemical exports has risen from USD 22.43 billion in 2012-13 to USD 26.97 billion in 2015-16. India is also a major importer of chemicals with an annual import value of around USD 35 billion.

Future growth in the chemical industry will be driven by potential demand for chemicals from textiles, construction, agrochemicals and petrochemicals sectors. A favourable policy environment is also expected to support growth in the industry. Government of India is in the process of introducing National Chemicals Policy to promote research and development, safety & security and infrastructure in the sector. Government has allowed 100% foreign direct investment in the sector.

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