India’s chemicals industry is a key pillar of the manufacturing sector, contributing ~7% to the national GDP and producing over 80,000 products. Ranked 6th globally and 3rd in Asia, the industry is on track to grow to US$400–450 billion by 2030, with ambitions to scale to US$850–1,000 billion by 2040, complemented by Government support.

India’s chemical sector remains concentrated on bulk, upstream production, limiting its expansion into high-value specialty chemicals and thus impacting global competitiveness. Targeted reforms are crucial to address import reliance, feedstock gaps, infrastructure bottlenecks, and regulatory hurdles, and to strengthen India’s role in the global chemical value chain.

To change this trajectory, the recently released NITI Aayog report “Chemical Industry: Powering India’s Participation in Global Value Chains” outlines a roadmap to build a US$1 trillion industry and expand India’s share in the global chemical value chain from 3.5% to 12% by 2040.

🔷 Seven Priority Interventions Recommended:
1) Develop World-Class Chemical Hubs – Establish globally competitive manufacturing zones
2️) Upgrade Port Infrastructure – Focus on the development of 8 high-potential clusters to enhance logistics efficiency
3️) Launch Opex Subsidy Scheme – Offer performance-based incentives on incremental sales for select players
4️) Accelerate R&D & Tech Access – Fund industry-academia R&D and enable global tech partnerships to boost self-sufficiency
5️) Streamline Environmental Clearances – Introduce a fast-track, transparent EC process with audit oversight
6️) Secure FTA Support – Negotiate FTAs with tailored provisions to benefit the chemical industry
7️) Upskill Talent Pool – Expand ITIs and specialized institutes to address skilled labor demand

India’s chemical industry is entering a high-growth, policy-driven transformation phase. As a consulting partner, we see this as a massive opportunity for stakeholders across the value chain — be it raw material producers, specialty chemical players, or global investors evaluating India as a sourcing and manufacturing hub.