CHEMICALS

December 2023
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 4

Market Overview 6

Recent Trends and Strategies 12

Growth Drivers 19

Opportunities 26

Key Industry Contacts 30

Appendix 32

2
Executive summary

2. HIGHLY DIVERSIFIED 3. STRONG GROWTH IN SPECIALTY

▪ The Indian chemicals industry is highly diversified, CHEMICALS
covering >80,000 products and employing >2 million
▪ The Indian specialty chemicals sector is expected to increase at a
people.
CAGR of 12.4%, from US$ 32 billion in 2019 to an estimated US$ 64
▪ A network of 200 national laboratories and 1,300 R&D
billion by 2025.
centres provides a strong base to the Indian chemical
▪ Also, ICRA’s ratings indicate improved exports and a positive outlook
industry to drive innovations.
for agrochemicals and surfactants.
▪ The chemical industry is expected to contribute US$
▪ On February 15th, 2023, Indian Speciality Chemical Manufacturer’
383 billion to India’s GDP by 2030.
Association (ISCMA) signed an MoU with USIIC to promote trade in
speciality chemicals.
1. GLOBAL POSITION
• Globally, India is the third-largest 4. LARGEST GLOBAL
consumer of polymers, fourth-largest DYE SUPPLIER
producer of agrochemicals and sixth-
largest producer of chemicals. ▪ India is the world leader in
• The Indian chemicals industry makes dye manufacturing,
up 3.4% of the global chemicals
industry.
2 3 accounting for 16%-18% of
global dyestuff exports.
• India's chemical sector, which is ▪ The Indian Dye is exported
currently estimated to be worth US$ to 90+ countries.
220 billion in 2022 and is anticipated to ▪ From April 2023 to June
grow to US$ 300 billion by 2025 and 2023 (provisional), India's
US$ 1 trillion by 2040.
• India has traditionally been a world 1 4
dye exports (Dyes and Dye
Intermediates) totalled US$
leader in generics and biosimilars and 561.56 million.
major Indian vaccine manufacturers,
contributing more than 50% of the
global vaccine supply.

Notes: GDP: Gross Domestic Product, FDI: Foreign Direct Investment, CAGR: Compounded Annual Growth Rate
Source: Department of Chemicals and Petrochemicals, Nirmal Bang Group

3
Advantage India

4
Advantage India
1. Growing demand 4. Opportunities
► Rise in demand from end-user industries such ► India’s specialty chemicals companies are
as food processing, personal care and home expanding their capacities to cater to rising
demand from domestic and overseas.
care is driving the development of different
► In July 2021, the government announced
segments in India’s specialty chemicals market. discovery of indigenous deposits of phosphatic
► The domestic chemicals sector's small and rocks. This will help expand fertiliser production
domestically and boost self-reliance in fertiliser
medium enterprises are expected to showcase
production.
18-23% revenue growth in FY22, owing to an ► The Odisha government accepted investment
improvement in domestic demand. applications worth ~US$ 345.3 million in the
metal, cement, chemical, plastic, food
► India is the 6th largest producer of chemicals in
processing and manufacturing sectors in April
the world and 3rd in Asia, contributing 7% to
India’s GDP.
1 4 2021. This is likely to generate 2,755 jobs.
► In July 2023, Global Chemicals and
Petrochemicals Manufacturing Hubs in India
► Chemicals and petrochemicals demand in India
(GCPMH 2023) was organized in Delhi, India.
is expected to nearly triple and reach US$ 1 ADVANTAGE
trillion by 2040. INDIA
2 3 3. Policy support
2. Increasing investments and ► Government to open 25,000 Jan Aushadhi
spending Kendras to make medicines available at
affordable prices.
► FDI inflows in the chemicals sector (other than ► Under the Union Budget 2023-24 the
fertilisers) reached US$ 21.71 billion between April government allocated Rs. 173.45 crore (US$
2000-September 2023. 20.93 million) to the Department of Chemicals
► The Department of Chemicals & Petrochemicals intend and Petrochemicals.
to bring PLI in chemical & petrochemical sector and will ► The PLI plan for the National Programme on
redraft the Petroleum, Chemicals and Petrochemicals Advanced Chemistry Cell Battery Storage has
Investment Region (PCPIR) guidelines. been approved by the Union Cabinet as of
May 2021.
► An investment of Rs. 8 lakh crore (US$ 107.38 billion)
► PLI schemes were introduced to promote Bulk
is estimated in the Indian chemicals and petrochemicals
Drug Parks, with a budget of Rs. 1,629 crore
sector by 2025.
(US$ 213.81 million).
Source: Budget 2021-22, News Articles, DPIIT, *Ultratech investors presentation May 2018

5
 Market Overview

MARKET OVERVIEW

6
Chemicals market in India
▪ Chemicals industry in India covers >80,000 commercial products.
▪ India accounts for 2.5% of the world’s global chemical sales, exporting to more
than 175 countries. Chemical industry market size (US$ billion)
▪ India is the 6th largest producer of chemicals in the world and 3rd in Asia,
contributing 7% to India’s GDP. CAGR 9.3%

▪ The industry is expected to reach US$ 304 billion by 2025 at a CAGR of 9.3%,
304.0
driven by rising demand in the end-user segments for speciality chemicals and 278.1
petrochemicals segment. 254.3
232.6
212.8
▪ Chemicals and petrochemicals demand in India is expected to nearly triple and 194.6
178.0
reach US$ 1 trillion by 2040.
▪ During April-September 2023 (provisional), India's dye exports (Dyes and Dye
Intermediates) totalled US$ 929 million.
▪ Specialty chemical companies are seeking import substitutions while exploring
export opportunities to accelerate their business. FY19 FY20 FY21 FY22 FY23 FY24 FY25

▪ The petrochemical demand is expected to record a 7.5% CAGR between 2019

and 2023, with the demand for polymers growing at 8%.
Chemical Industry Revenue Shares in FY22
▪ India is the third largest polymer consumer in the world and is expected to
consume 60 million tonnes by 2040.
▪ Chemicals and Chemical Products gross bank credit grew by 15.6% in May
2022. Non-SME
30.0%
▪ The agrochemicals market in India is expected to register an 8.6% CAGR to
reach US$ 7.4 billion between 2021 and 2026.
▪ Specialty chemicals account for 20% of the global chemicals industry's US$ 4
70.0%
trillion, with India's market expected to increase at a CAGR of 12% to US$ 64 SME
billion by 2025. This gain would be driven by a healthy demand growth (CAGR
of 10-20%) in the export/end-user industries.

Source: Department of Chemicals and Petrochemicals, The Brokerage

7
Chemical's market is split into five key segments

Chemical's Market

Petrochemicals Specialty
Bulk chemicals Fertilisers Agrochemicals
& polymers chemicals

▪ These are groups of ▪ These chemicals are ▪ These provide nutrients for ▪ These are derivatives of ▪ These chemicals are
chemicals, which are derivative of several plant growth; are divided basic chemicals that are used to protect crops
manufactured on a large chemical compounds into organic/inorganic and manufactured for specific against insects and
scale and further divided such as hydrocarbons, natural/synthetic. Further, end-use solutions. The pests and include
into organic, inorganic which are derived from these can be broadly characteristics of these fungicides, herbicides,
and alkali chemicals crude oil or natural gas classified into phosphate, chemicals include high- and insecticides, among
potassium and nitrogenous value, high R&D and low others. These chemicals
volume can be applied in water
irrigation, seeds, soils
and crops

8
Evolution of the Indian chemical sector

1939-1945 1950s-1960s 1980s-1990s 1990s-2000s 2000s to date

▪ Foreign drug supplies ▪ Indian government ▪ Expansion of the ▪ Indian players and MNCs ▪ The chemical industry is
were decreased, and established five public- petrochemical industry. collaborated for key expected to contribute
several Indian sector companies. ▪ Development of investments. US$ 383 billion to India’s
pharmaceutical ▪ Established Hindustan integrated naphtha and ▪ Lower tariff barriers GDP by 2030.
companies were Antibiotics Ltd. (HAL) in gas crackers, along with exposed the domestic ▪ Indian chemical
established. 1954 and Indian Drugs related downstream industry to competitors companies spend ~1% of
their revenue on R&D.
▪ Companies included and Pharmaceuticals Ltd. plants for polymers, (from imports).
▪ Chemicals contribute 3%
Unichem, Chemo (IDPL) in 1961. synthetic fibers,
to the total FDI equity
Pharmaceuticals, Zandu aromatics and other
inflow and ~8% to the
Pharmaceutical Works, chemicals.
country’s exports.
Chemical Industrial and
Pharmaceutical ▪ Investments in
Laboratories (CIPLA) petrochemicals are driven
and East India by growth in end-user
Pharmaceutical Works. segments.

Source: KPMG report, News Articles

9
Key players in the chemical sector…(1/2)
Indian Companies

PIDILITE INDUSTRIES LIMITED

1 Adhesives, sealants, waterproofing solutions, construction chemicals, industrial resins,
and polymers.

TATA CHEMICALS LIMITED

2 Gypsum , soda ash, soda bicarbonate, cement, salt, marine chemicals and crushed
refined soda.

UNITED PHOSPHORUS LIMITED

3 Crop protection, herbicide, fungicide, insecticide, water conservation, seed treatments,
adjuvants, biosolutions and fumigants.

GUJARAT FLUOROCHEMICALS LIMITED

4 Caustic soda, special chlorine derivatives, sodium chlorate, caustic potash,
chloromethane, phosphoric acid, hydrogen peroxide and water treatment solutions.

RELIANCE INDUSTRIES LIMITED

5 Polymers, elastomers, polyesters, aromatics, fibre-intermediates and advanced
materials.

Note: This list is indicative

Source: Company website

10
Key players in the chemical sector…(2/2)
International Companies

BASF INDIA LIMITED

1 Fungicide, herbicide, insecticide, industrial gases, alcohols and aldehydes, glycol ethers,
glycol ether acetates and esters.

E.I. DU PONT INDIA PRIVATE LIMITED

2 Adhesives, digital printing inks and packaging materials & solutions.

MITSUBISHI CHEMICAL INDIA PRIVATE LIMITED

3 Industrial chemicals, basic petrochemicals, solvents and methyl methacrylate monomer
& derivatives acrylonitrile & related products.

SABIC INDIA PRIVATE LIMITED

4 Aromatics, chlor-alkali, ethanolamines, ethoxylated surfactants, glycols, linear alpha
olefins, natural detergent alcohol and olefins.

EXXONMOBIL COMPANY INDIA PRIVATE LIMITED

5 Butyl, ethylene propylene diene (EPDM) rubber, polyethylene products, polymer
modifiers, polyolefin plastomers & elastomers and polypropylene.

Note: This list is indicative

Source: Company website

11
Recent Trends and Strategies

12
Chemical sector production capacity

Production of Chemicals (‘000 MT) Production of Petrochemicals (‘000 MT)

874.69 1,773.74

874.30 1,685.35

Feb-23 Sep-23 Feb-23 Sep-23

▪ Major chemical production reached 874.69 million metric tonnes (MMT) in September 2023, while petrochemical production reached 1,685.35 MMT.
▪ In September 2023, production levels of various chemicals were as follows:
▪ Soda Ash: 230.82 MMT
▪ Caustic Soda: 277.15 MMT
▪ Liquid Chlorine: 198.83 MMT
▪ Formaldehyde: 22.58 MMT
▪ Pesticides and Insecticides: 22.49 MMT
• At the CPMA - Argus Petrochemical Online Forum held on August 25, 2021, the President of India's Chemicals and Petrochemicals Manufacturers
Association (CPMA), Mr. Kamal Nanavaty, said that the Indian petrochemicals industry will have to increase its production capacity tenfold to meet
higher demand by 2050. He also highlighted that India's consumption is estimated to double every nine years at an annual rate of 8%.

Notes: MT: metric tonnes

Source: Department of Chemicals and Petrochemicals

13
Chemical sector import and export statistics
▪ From April 2023 to September 2023 (Provisional), exports of organic (US$
2.39 billion) & inorganic (US$ 823 million) chemicals were estimated at US$
3.21 billion. Imports and Exports of Chemicals (US$ million) – FY24
▪ Imports of organic (US$ 5.64 billion) and inorganic (US$ 2.96 billion)
chemicals totalled US$ 8.6 billion from April 2023 to September 2023 7,440.2
(Provisional).

▪ From April 2023 to September 2023 (Provisional), exports of castor oil,

4,985.7
essential oil, and cosmetics and toiletries stood at US$ 1.61 billion.

▪ Imports of castor oil, essential oil, and cosmetics and toiletries are US$ 1.33
billion during (April-September) 2023-24 (Provisional).

▪ From (April-September) 2023-24 (Provisional), the export of agrochemicals

was US$ 1.70 billion, dyes were US$ 867 million and the other dye
intermediates were US$ 62 million. 2023-24 (April-June)
▪ The import of agrochemicals was US$ 738 million, dyes were US$ 120 Import Export
million and the other dye intermediates were US$ 522 million during (April-
September) 2023-24 (Provisional).

▪ India exported to more than 175 countries in 2022. The major export
destinations were the USA, China and new destinations viz. Turkey, Russia
and North East Asian Countries (China, Hongkong, Japan, Korea RP,
Taiwan, Macao, Mongolia).

▪ Around 50% of the agro-chemicals are exported from India to the world. India
is the top producer and exporter of castor oil, with 85-90 % of total global
exports in the world.

▪ India holds a strong position in international trading of chemicals and ranks

9th in exports and 6th in imports at a global level (excluding pharmaceuticals).

Source: Department of Chemicals and Petrochemicals, Directorate General of Commercial Intelligence and Statistics

14
Agrochemical trends in India

▪ Globally, India is the fourth-largest producer of agrochemicals after the United

Pesticides and Insecticides Production (‘000 MT)
States, Japan and China.
▪ India is the fourth net exporter of agrochemicals and the thirteenth-largest
exporter of pesticides and disinfectants. The country’s exports have increased

22.67

22.49
22.27
22.02

21.86
21.50
on account of low-cost manufacturing, availability of technically trained

20.58

20.45

20.30
20.25

20.10
19.61

18.90
manpower, seasonal domestic demand, overcapacity, competitive pricing and

18.32

17.01
strong presence in generic pesticide manufacturing.
▪ The rise in demand in the agricultural segment is driving the growth of
agrochemicals in India
▪ In October 2020, the government urged players in the agrochemicals industry
to come out with new molecules of global standards for the farmers' benefit,
while CropLife India, the industry body, pitched for stable policies and Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 May-23 Sep-23
regulatory regimes to boost growth in the sector
▪ The current GST on agrochemicals is 18%. In January 2021, CropLife India, Consumption of Agrochemicals by Segments in India – 2021
an industry body, demanded the government reduce GST as this would help (MT, Technical Grade)
lower the prices of agrochemicals and benefit farmers.
▪ According to Expert Market Research (EMR), the market is expected to 1.0% Insecticides
increase at a CAGR of 8.6% between 2021 and 2026 to reach ~US$ 7.4 16.0%
billion.
Fungicides and
▪ Agrochemicals in India is currently a US$ 5.5 billion market, growing at a Bactericides
CAGR of 8.3%. By 2040, it is expected to account for almost 40% of India’s 51.0% Herbicides
overall chemicals exports.
32.0%
▪ India’s agrochemicals export stood at US$ 1.70 billion from April 2023- Others
September 2023.

Source: Ministry of Chemical & Petrochemical Statistics, News Articles

15
Chemical trends in India

Chemical Production in 2015-2023 (MMT)

Alkali chemicals Inorganic chemicals Organic chemicals Pesticides Dyes & Pigments 258
14,000 318
382 384 192
217 255 363 276
12,000 320 327
304 367 213 1,902
285 188 214
186 1,847
10,000 1,884 1,788 1,051
1,799 1,906
1,638 1,063 949
1,619 1,589 1,064 978
8,000 1,058
1,002 1,053
944
6,000
9,693
4,000 8,043 8,456 7,776 8,206
7,009 7,631
6,625 6,802
2,000

-
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

▪ In 2022-23 (April-March), Alkali chemicals stood at 73.3% of the total chemical production.

▪ Government initiatives such as the promotion of small and midsized ‘Sodium Bicarbonate’ and ‘Ammonia’ processing industries in proximity to soda ash
manufacturing units are likely to boost demand for soda ash in the country.

▪ The speciality chemicals market in India would grow faster than China, increasing its market share to 6% by 2026 from 3-4% in fiscal 2021.A shift in
the global supply chain brought on by the China+1 strategy and a resurgence in domestic end-user demand will fuel significant revenue growth of
18–20% in 2022 and 14–15% in 2023.

Note: *for FY20 and FY21 Pesticide includes production of Pesticides and Insecticides, *Until February 2022, ** Until September 2022
Source: Ministry of Chemical & Petrochemical Statistics

16
Petroleum, chemicals and petrochemicals investment region
(PCPIR)
To promote investments and development in this sector, Indian government approved four PCPIRs
Location/Region Dahej Location/Region Paradeep
Actual Investment Rs. 1,12,873 crore Actual Investment Rs. 45,000 crore (US$
(US$ 14.78 billion) 5.89 billion)
Total Area 453 Sq. Kms Total Area 284.15 Sq. Kms
Actual employment 1.84 lakh Actual employment 38,000
generated generated
Anchor Tenant ONGC Petro-additional Anchor Tenant Indian Oil Corporation
Ltd. Ltd.
Location/Region Cuddalore -
Location/Region Vishakhapatnam
Nagapattinam
Actual Investment Rs. 43,744 crore (US$
Actual Investment Rs. 8,100 crore (US$
5.73 billion)
1.06 billion)
Total Area 604 Sq. Kms
Total Area 257 Sq. Kms
Actual employment 1.1 lakh
Actual employment 13,950
generated
generated
Anchor Tenant Hindustan Petroleum
Anchor Tenant Nagarjuna Oil
Corporation Ltd.
Corporation Ltd.

▪ PCPIR in Dahej, Gujarat attracted more investments compared with the other three cities-wherein various Indian and multinational companies
such as ONGC, GACL, OPAL, BASF and LANXESS have opened facilities. The Gujarat Infrastructure Development Corporation (GIDC) has
made an investment of around Rs. 17,317 crore (US$ 2.09 billion) for infrastructure development in the PCPIR.
▪ In December 2020, the PCPIR policy is being completely redesigned. Under the new PCPIR Policy 2020-35, it has been targeted to attract a
combined investment of US$ 142 billion (Rs. 10 lakh crore) by the year 2025, Rs. 15 lakh crore (US$ 213 billion) by 2030 and Rs. 20 lakh crore
(US$ 284 billion) by 2035 in all the PCPIRs across the country.
▪ The four PCPIRs are expected to generate employment for ~33.83 lakh people. ~3.50 lakh persons were employed in direct and indirect
activities related to PCPIRs by the end of 2020.
Source: Federation of Indian Chambers of Commerce and Industry, News Articles

17
Chemical players focusing on sustainable development

Indian chemical companies are investing in innovative solutions, focusing on issues such as water,
environmental impact, raw materials, safety over lifecycle and energy use

3. Reliance Industries
1. Tata Chemicals
3
▪ As of June 2021, Reliance Industries (RIL),
▪ Tata Chemicals commissioned a which operates the world's largest refining
solar photo-voltaic plant to save facility in Jamnagar, Gujarat, was planning
energy. to invest US$ 10.1 billion in clean energy
over the next three years to become a net
▪ With an aim to control greenhouse
carbon zero corporation by 2035.
gas emissions, it proposed to
establish a 150 kWp grid- ▪ In May 2023, Reliance Industries plans to
connected solar photovoltaic set up a 10 GW solar project in Andhra
power plant on the rooftop terrace
of the electrical substation.
▪ In January 2023, Tata Chemicals
1 2 Pradesh.

▪ In June 2023, Reliance was planning to

invest Rs. 75,000 crore (US$ 9.06 billion)
Europe signed a pact with Essar- over 5 years to expand its oil to chemical
backed Vertex for the sale of low- business.
carbon hydrogen.
▪ Tata Chemicals intended to invest
about Rs. 8,000 crore (US$ 967.45 2. Kanoria Chemicals & Industries Limited
million) over the next 2-3 years as ▪ The company’s AlcoChem Ankleshwar Division runs ‘waste to wealth’ programme, which
capex on an expansion spree that involves treatment of effluent and recycling water by a ‘Reverse Osmosis’ process
includes scaling businesses developed by the company.
sustainably.
▪ In February 2023, the company is setting up a new formaldehyde plant with 300 TPD
Source: News Articles capacity at the existing manufacturing facility at GIDC, Ankleshwar in Gujarat.

18
 Growth Drivers

GROWTH DRIVERS

19
Strong demand and policy support driving investments

Growing demand Policy support Increasing investment

100% FDI under the

Establishing PCPIRs
Higher real disposable automatic route in the
(investment regions
incomes chemical sector,
for petroleum,
except for hazardous
chemicals and
chemicals
petrochemicals)

Resulting in
MSIHC Rules to be
Shift in production and Domestic and
merged with CAEPPR
Inviting
consumption towards overseas companies
to safely handle
Asian and Southeast investing in greenfield
hazardous chemicals
Asian countries or brownfield projects

Shift in consumer
preference towards Increase in FDI
environment-friendly investments
products

Notes: MSIHC: Manufacture Storage and Import of Hazardous Chemicals, CAEPPR: Chemical Accidents Emergency Planning, Preparedness and Response
Source: News Articles

20
Key growth drivers…(1/2)

Middle-class Growth in India (million)

160 CAGR 7.4%

• By 2030, India is likely to have ~80% of the 140 148
households in the middle-income group. 120

Rise in 100
• The growing middle-class and increasing 97
104
80 90
domestic urbanisation is driving the demand for 78 84
60 68 73
demand personal care, agrochemicals, food, paints
40
63
& coatings resulting into higher
20
consumption of chemicals per capita.
0
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY30

Manufacturing as % of GDP
• Government considers the manufacturing
sector to be a key focus area and has
25
contacted ~1,450 companies worldwide to
Government 20
manufacture in India.
aims to boost
• The government plan includes 2-3 15
manufacturing
autonomous zones which does not have 10 20
share in GDP to labor and land laws. 14
20% by 2025 5
• ~300 companies are actively pursuing
0
production plans in mobiles, electronics,
2019 2025E
medical devices and textiles.

Source: National Council of Applied Research, World Economic Forum

21
Key growth drivers…(2/2)

EMERGING MANUFACTURING HUBS

1 The dedicated integrated manufacturing hubs under Petroleum, Chemicals and Petrochemicals Investment
Regions (PCPIR) policy to attract an investment of Rs. 20 lakh crore (US$ 276.46 billion) by 2035.

RISE IN DISINFECTANT DEMAND POST COVID-19

2 With increasing demand for disinfestation of personal and public places post COVID-19, the chloro-alkali,
ethanol, personal care, and surfactant industry is expected to record significant growth in near future.

FOREIGN INVESTMENT
3 Presence of prominent global players, such as BASF, Dow Chemicals, Bayer and others, 100% FDI in the
chemicals sector and stringent laws on anti-dumping to drive the Indian chemical market.

SKILLED AND LOW-COST MANPOWER

4 The skilled and low-cost labour, world-class engineering and strong R&D set-up enable chemicals
industries in India.

5 GROWING END USE INDUSTRIES

Demand from packaging, construction, automotive and other industries to drive the Indian chemical market.

Note: This list is indicative

Source: Company website

22
Key industries driving growth

2. WATER TREATMENT 3. TEXTILE, FLAVOURS &

▪ Increasing urbanisation and population
FRAGRANCES
is driving the demand for safe drinking ▪ India has witnessed increasing demand for wide
water. Moreover, rising awareness of range of cosmetic chemicals, health care
hygiene among the people is leading to products and hygiene products that use specialty
excessive water consumption. chemicals, polymers and oleo chemicals. This
segment is likely to outperform other segments.

1. AUTOMOTIVE
• Disruption in automotive sector
4.CONSTRUCTION
with the emergence of ▪ ‘Smart City’ projects by the Indian
autonomous driving, connected
cars, electric vehicles and 2 3
government are driving growth of
chemical companies in India.
shared mobility will affect the Availability of essential raw materials
value chain of Indian chemical at low cost is anticipated to increase
companies supplying chemicals demand for construction chemicals.
to automotive applications.
1 4

Source: News Articles

23
Recent developments and investments by key players (1/2)

1
Rise in production
▪ At the CPMA - Argus Petrochemical Online Forum held on August 25, 2021, President of India's Chemicals and Petrochemicals Manufacturers
Association (CPMA), Mr. Kamal Nanavaty, said that the Indian petrochemicals industry will have to increase its production capacity tenfold to meet
higher demand by 2050. He also highlighted that India's consumption is estimated to double every nine years at an annual rate of 8%.
▪ In July 2022, NTPC Renewable Energy Limited (NTPC REL) and Gujarat Alkalies and Chemicals Limited (GACL) signed an MoU to participate in the
establishment of India's first commercial-scale Green Ammonia and Green Methanol plants.
▪ From August 2021-August 2022, India sold 3.27 crore bottles of nano urea and planned to produce 6.0 crore bottles of nano urea by the end of FY22-23.

2
M&As
▪ In June 2023, Himadri Speciality Chemical invested Rs. 58 crore (US$ 7.01 million) in Sicona Battery Technologies Pty Ltd, (Sydney) for a 12.79% stake.
▪ In June 2023, Mumbai-based UPL Ltd, will hive off its specialty chemicals business on a slump sale basis to wholly-owned arm UPL Speciality Chemicals
Ltd for Rs. 3,572 crore (US$ 431.96 million).
▪ In December 2022, GMM Pfaudler Ltd has entered into an agreement on December 8, 2022, to acquire Mixel France SAS and its wholly owned subsidiary
Mixel Agitator Co. Ltd. for US$ 7.63 million.

3
Self-reliant in fertilisers
▪ By 2023, India will be self-reliant in fertiliser production and reduce import dependency, by establishing new units covering an investment of Rs.400
billion. At present, Indian fertiliser production stands at 42-45 million tonnes and imports at 18 million tonnes

4
Public-private partnership (PPP) model
▪ In March 2023, Chennai awaits more bio-CNG plants to enable switch to clean energy.
▪ The Department of Atomic Energy (DAE) is constructing India’s first research reactor on a public-private partnership (PPP) model.

Source: Company Websites, News Sources,

24
Recent developments and investments by key players (2/2)

5
Skills and technical support
▪ In August 2023, the Prime Minister announced a subsidy of US$ 120.93 billion (Rs. 10 lakh crore) for providing cheaper Urea to farmers.
▪ Central Institute of Petrochemicals Engineering & Technology (CIPET), under the Ministry of Chemicals and Fertilisers, will establish two new ‘Centres
for Skilling and Technical Support’ (CSTS) at Bhagalpur, Bihar and Varanasi, Uttar Pradesh. This will act as a catalyst for development and growth of
new and existing industries in the region.
▪ In September 2021, CareerLabs, India’s first profile building EdTech start-up, announced an industry certification programme for chemical engineers in
partnership with Dr. Reddy’s Laboratories Ltd. The partnership aims at opening avenues for students to pursue highly rewarding careers in the
pharmaceutical industry and concurrently meet the ever-increasing demand for chemical engineers to cater to the need of the hour with relevant skill
development.
▪ In June 2021, the Rubber Skill Development Council (RSDC) announced that it is expanding its vertical to cover the chemicals and petrochemicals
sectors and will be now known by the name Rubber, Chemical, Petrochemical Skill Development Council (RCPSDC). The council will implement skill
training programmes in chemicals and petrochemicals verticals for the youth across country.

6
International collaboration and investments
▪ In December 2022, GMM Pfaudler Ltd has entered into an agreement on December 8, 2022 to acquire Mixel France SAS and its wholly owned
subsidiary Mixel Agitator Co. Ltd. for US$ 7.63 million.
▪ In September 2022, Royal Society of Chemistry (RSC) and CSIR work together to support chemistry in schools across India.
▪ In September 2022, Spanish perfume maker Puig acquired a controlling stake in Kama Ayurveda Pvt. owning 85% in the company.
▪ In May 2022, a global investment firm, PAG acquired Optimus group along with consortium partners CX Partners and Samara Capital.
▪ Advent International acquired a majority position in Avra Labs in January 2022, uniting it with two other businesses it had previously acquired, RA
Chem Pharma and ZCL Chemicals.
▪ In 2021, the chemicals industry bagged PE/VC investments of a total of US$ 74 million as compared to US$ 53 million in 2020.
▪ The government is planning to hold roadshows in eight overseas markets for the proposed investors’ summit planned in January 2022, with focus on
the petrochemicals sector, and is eager to attract investors to its newly launched Petroleum, Chemicals and Petrochemicals Investment Region
(PCPIR) near the upcoming crude oil refinery in Pachpadra village (in Barmer district, Rajasthan).
▪ In October 2021, Rosneft, Russia, launched a large-scale petrochemical production development programme in India with investments worth ~US$
750 million at the current implemented stage.

Source: Company Websites, News Sources,

25
 Opportunities

OPPORTUNITIES

26
Specialty chemicals - aggressive capex to drive growth

▪ Specialty chemical companies in India have started accelerating their

capex plan on the back of strong growth visibility and emerging Subsegments User Industries
opportunities
Paints & Coatings Construction, Automotive
▪ Due to growing environmental concerns, many chemical companies in
China ceased activities in 2018; this led to an increase in Special Polymers Packaging Automotive
manufacturing of specialty chemicals in the Indian market to ensure
uninterrupted supply
Construction Chemicals Infrastructure, Real Estate
▪ Indian manufacturers have recorded a CAGR of 11% in revenue
between FY15 and FY21, increasing India’s share in the global specialty Paper Chemicals Printing, Packaging
chemicals market to 4% from 3%, according to the Crisil report.
▪ A revival in domestic demand and robust exports will spur a 50% YoY Textile Chemicals Apparel, Technical Textile
increase in the capex of specialty chemicals manufacturers in FY22 to
Rs. 6,000-6,200 crore (US$ 815-842 million). Water Chemicals Industrial Water, Municipal Water

▪ Revenue growth is likely to be 19-20% YoY in FY22, up from 9-10%

Cosmetic Chemical Bath, Shower, Haircare
in FY21, driven by recovery in domestic demand and higher
realisations owing to rising crude oil prices and better exports.
Flavours & Fragrances Food Processing, Personal Care
Key growth drivers in the end-user industry for specialty chemicals
include the following: Agro Chemicals Agriculture, Exports
▪ Paints & coatings: Increase in urbanisation, increase in middle-income
households, high replacement demand and increase in per capita Home Care Surfactants Laundry Care, Dishwashing
income.
Colourants Textile, Exports
▪ Textile: Increase in Indian export, increase in urbanisation and higher
disposal income.
▪ Construction: Low expenditure on admixtures compared with China and
the US.
▪ Home care: Increased consumption.

Source: Department of Chemicals and Petrochemicals

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Favourable initiatives by government
▪ A 2034 vision for the chemicals and petrochemicals sector has been set up by the government to explore

1 opportunities to improve domestic production, reduce imports and attract investments in the sector. The
government plans to implement production-link incentive system with 10-20% output incentives for the
agrochemical sector; to create an end-to-end manufacturing ecosystem through the growth of clusters.

2 ▪ 100% FDI is allowed in the chemical sector under automatic route with exception to few hazardous
chemicals

3 ▪ In April 2023, Cabinet approved the National Medical Devices Policy, 2023.

▪ Industrial licensing is approved in most sectors, except for few hazardous chemicals. The Indian
4 Government supports the industry in research & development, reduced the basic customs duty on
several products and offers support through the ‘Make in India’ campaign

▪ Four Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) were set up as the
5 investment regions for petroleum, chemicals and petrochemicals along with associated services

6 ▪ The Government of India is considering launching a production-linked incentive (PLI) scheme in the
chemical sector to boost domestic manufacturing and exports.

Source: Department of Chemicals and Petrochemicals,

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Chemical industry: Exploring new opportunities

2. ALTERNATIVE AND LOW-COST 3. GLOBAL FOOTPRINT AND

FEEDSTOCK CUSTOMER SEGMENTS
• In November 2020, NextChem, and Indian Oil Corp. • Aarti Industries generates >40% revenue from the
Ltd. (IndianOil) signed a memorandum of global markets.
understanding (MOU) to use NextChem technologies to • UPL has presence in multiple markets with >30% of
build industrial projects to support industrialisation of its revenue generated from Latin America.
India's sustainable development. • SH Kelkar has completed several strategic
• The projects would emphasis on recycling of plastics, acquisitions, including China-based Anhui Ruibang
production of biofuels from renewable feedstock and Aroma and Italy’s Creative Flavours and Fragrances;
circular fuels and non-recyclable waste chemicals. this helped expand its portfolio, improve technological
platforms and gain access to new markets.

1. VALUE-CHAIN 4. EXPOSURE TO
INTEGRATION CUTTING-EDGE
• Camlin Fine Sciences 2 3 TECHNOLOGIES
acquired Borregaard Italia • Atul Chemicals, partnered
Spa54, a raw-material catechol with Akzo Nobel to access
manufacture, and Ningbo state-of-the-art eco-friendly
Wanglong, an end-product hydrogenation technology for
vanillin flavour manufacturer monochloroacetic acid (MCA)
• The vertical integration made
CFS the third-largest vanillin 1 4 production in India.

producer worldwide

Many Indian chemical companies are focussing on attaining scale to build their margins and enhance environmental sustainability
Source: Company Website, News Articles

29
Key Industry Contacts

30
Key Industry Contacts

Agency Contact Information

Dept. of Chemicals & Petrochemicals,

Ministry of Chemicals & Fertilisers,
Department of Chemicals &
341-(C), A-wing, 3rd floor, Shastri Bhawan, New Delhi-110001
Petrochemicals
Phone: +91 11 23383428 Fax: +91 11 23073682(F)
Email: samir.biswas@gov.in Website: https://chemicals.nic.in
Sir Vithaldas Chambers, 6th Floor 16 Mumbai Samachar Marg,
MUMBAI - 400 001
Indian Chemical Council
Phone: +91 22 61144000 / 22048043
Email: iccmumbai@iccmail.in, events@iccmail.in Website:
www.icmaindia.com
A-317, 3rd Floor, Antop Hill Warehousing
Complex, Vidyalankar College Road, Near Barkat
Dye Manufacturers Association of
Ali Naka, Wadala (East), Mumbai - 400 037. India
India
Phone: +91 22 24158156, 24158157 Fax: +91 22
24157374
Email: info@dmai.org Website: http://dmai.org/
Alkali Manufacturers Association of India,3rd Floor, Pankaj
Chambers, Commercial Complex
Alkali Manufacturers Association of
Preet Vihar, Vikas Marg, Delhi 110092
India
Phone: +91 11 22432003, 22410150 Fax: +91 11 22468249
Email: hkanand@ama-india.org, info@ama-india.org Website:
www.ama-india.org
1156, Bole Smruti, Suryavanshi Kshatriya Sabhagriha Marg,
Indian Specialty Off. Veer Savarkar Marg,
Chemical Dadar (West), Mumbai - 400 028
Manufacturers' Phone: +91 22 2446 5003
Association Email: info@iscma.in, iscma@email.com Website:
www.iscma.in

31
Appendix

32
Glossary

▪ CAGR: Compound Annual Growth Rate

▪ Capex: Capital Expenditure

▪ MMTPA: Million metric tons per annum

▪ CENVAT: Central Value Added Tax

▪ EHTP: Electronic Hardware Technology Park

▪ EPCG: Export Promotion Capital Goods Scheme

▪ FDI: Foreign Direct Investment

▪ FY: Indian Financial Year (April to March); So, FY10 implies April 2009 to March 2010

▪ LCD: Liquid Crystal Display

▪ R&D: Research and Development

▪ US$ : US Dollar

▪ Wherever applicable, numbers have been rounded off to the nearest whole number

33
Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 73.20 2021 73.93
2021-22 74.42 2022 79.82
2022-23 78.60 2023* 83.15

Note: *Until November 2023

Source: Foreign Exchange Dealers’ Association of India

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