53rd Annual Integrated Report 2023-24
53rd Annual Integrated Report 2023-24
Over the past decade, India’s chemical industry has experienced significant growth due to strong macro-economic fundamentals and rising demand, creating favourable opportunities. India’s manufacturing competitiveness stands strong against other major global chemical players as countries focus on diversifying supply chains. This places India as a potential hub for chemical manufacturing in the future.
The chemical industry accounts for 7% of India’s Gross Domestic Product (GDP) and is crucial for the nation’s economic expansion. The sector is poised for exponential growth, anticipated to rise from USD 220 Billion to USD 304 Billion by 2025.
Chemical industry’s contribution to India’s GDP
Historically reliant on imports, India’s chemical sector has significantly advanced over the past decade. Through backward integration and the ‘Make in India’ initiative, the country aims to reduce import dependency. With an emphasis on research and development, India is driving innovation. The country holds 2.5% of global chemical sales and exports to over 175 countries, positioning itself to increase its market share and competitiveness.
The global shift in supply chains, exemplified by the “China Plus One” trend and potential “Europe Plus One” strategy, bodes well for the Indian chemical sector. With ongoing geopolitical tensions, companies are increasingly turning to India for its strong value proposition, including scale, technology, raw materials, skilled labour and supportive government policies.
The chemical industry is undergoing digital transformation, improving supply chain management, customer engagement, manufacturing processes and R&D, driven by modern and cutting-edge technologies. Trends such as advanced analytics, cloud computing, big data, AI, IoT, digital twins, blockchain, AR, VR and data-driven product development are gaining prominence.
Consumer preferences are shifting towards environmentally sustainable products and services. The growing demand for health and hygiene is prompting a shift towards greener and safer offerings. Sustainability is now a crucial aspect of the chemical industry, with many companies adopting green chemistry in line with decarbonisation efforts.
The Indian government has implemented various initiatives to bolster the chemical industry, including chemical development schemes, plastic parks and Chemicals and Petrochemicals Investment Regions (PCPIRs). Additionally, ₹ 18,100 Crores have been allocated under the production linked incentive (PLI) scheme to enhance domestic manufacturing and exports.
