India is the third-largest consumer of polymers, fourth-largest producer of agrochemicals and sixth-largest producer of chemicals. India’s chemical industry is extremely diversified and can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers and fertilisers. Globally, India is the fourth-largest producer of agrochemicals after the United States, Japan and China. India accounts for about 16% of the world production of dyestuffs and dye intermediates. Indian colorants industry has a global market share of about 15%. India holds a strong position in exports and imports of chemicals at a global level and ranks 14th in exports and 8th in imports at global level and that does not include pharma-chemicals.
The Indian chemicals industry stood at US$ 178 billion in FY20 and is expected to reach US$ 304 billion by 2025 registering a CAGR of 9.3%. The demand for chemicals is expected to expand by 9% per annum by 2025. The chemical industry is expected to contribute US$ 300 billion to India’s GDP by 2025.
An investment of Rs. 8 lakh crore (US$ 107.38 billion) is estimated in the Indian chemicals and petrochemicals sector by 2025.
The demand for specialty chemicals is expected to rise at a 12% CAGR in 2019-22. The petrochemicals demand is expected to record a 7.5% CAGR between 2019 and 2023, with polymer demand increasing at 8%. The Indian agrochemicals market is expected to register an 8% CAGR to reach US$ 3.7 billion by FY22 and US$ 4.7 billion by FY25.
Under the Union Budget 2021-22, the government allocated Rs. 233.14 crore (US$ 32.2 million) to the Department of Chemicals and Petrochemicals. Total FDI inflow in the chemicals sector reached US$ 18.06 billion between April 2000 and September 2020.