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Chemical Industry in India –Investment, FDI Policy, & Market


World’s chemical nucleus

Market size of Chemicals & Petrochemicals sector in India is worth ~$178 bn

Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into Bulk chemicals, Specialty chemicals, Agrochemicals, Petrochemicals, Polymers and Fertilizers. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, makes for economies of scale.

India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates. Chemicals industry in India has been de-licensed except for few hazardous chemicals. Upcoming Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) and Plastic parks will provide state-of-the-art infrastructure for Chemicals and Petrochemicals sector.

  • The Chemicals and Petrochemicals market is projected to reach $300 bn by 2025
  • India ranks 11th in the World Exports of Chemicals (excluding pharmaceutical products) and ranks 6th in the World Imports of Chemicals (excluding pharmaceutical products)
  • The combined exports of Major Chemicals and Major Petrochemicals in the year 2021-22 (up to February 2022) has increased to INR 129.24 thousand crores from INR 90.9 thousand crores. Imports have increased to INR 152.65 thousand crores from INR 92.03 thousand crores over the corresponding period of last year
  • Demand for chemical products is expected to grow at approximately 9% p.a. during 2020-25
  • Indian chemical industry employs more than 2 million people
  • Fertilizers production (weight: 2.63 percent) increased by 8.2 percent in June 2022 over June 2021. Its cumulative index increased by 13.2 percent during April to June 2022-23 over the corresponding period of previous year.
  • FDI in Chemicals sector (excluding fertilizers) is $ 19.4 Bn (April’2000 to March 2022)

100% FDI is allowed under the automatic route in the chemicals sector (except in the case of certain hazardous chemicals)

For further details, please refer to FDI Policy


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