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Overview
Chemical Industry is an important constituent of the Indian
economy having approx. US $ 28 billion turnover which is
approx. 7% of India’s GDP.

In terms of volume, it is 12th largest in the world, and 3rd

largest in Asia.

Within India, it constitutes about 15% of manufacturing

capacity and
20% of the Excise revenue to the Government of India.

Chemical industry has weightage of about 13% in the index of

industrial production.

The global chemical industry is valued at about US $ 1.7

trillion. Of
which, India’s chemical sector accounts for just 2%
Source: Dept. of chemical and petrochemical
 Overview contd…
India’s present share in Global Trade is 0.6% i.e. USD 45 Billion
& it has been expected to increase the same to 1% i.e. USD
80 Billion by 2011.

Chemical & Pharmaceutical Industry is the most important

Foreign Exchange earner with major value additions through
out the value chain. The value is added using Knowledge,
energy and Capital.

The Indian Chemical sector accounts for 13-14% of total

exports and 8-9% of total imports of the country.
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Source: Dept. of chemical and petrochemica
Major Chemicals

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 Production Centers
United Phosphorous Ltd, Mumbai
P.I Industries, Jaipur
Excel India, Mumbai
Colour Chem. Ltd., Mumbai
Sudarshan Chemical Industries, Pune
Colourtex, Ahmedabad
Jubilant Organosys Ltd., New Delhi
Herdilia-Schentady Ltd. Mumbai
National Organics Chemicals Ltd., Mumbai
Gujarat Heavy Chemicals Ltd., Ahmedabad.
India Glycols Ltd., New Delhi
Gujarat Alkalies and Chemicals Ltd., Baroda
ICI Calcutta
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 STATE WISE SHARE IN PRODUCTION OF
SELECTED MAJOR CHEMICALS (2006-07)

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Source: Ministry of Commerce
 Import of Selected
Chemicals
(

7
Source -
 Export of Selected
Chemicals
(

8
Source -
 Domestic Industry

Indian Chemical Industry

• 12th largest in the world and 3rd largest in Asia
• a strong player in the generic pharmaceutical
market.
• 2nd largest producer of agrochemicals in Asia.

•Indian pharmaceutical industry ranks 4th in volume & 13th in

terms of value in the world.

•Indian Chemical Industry (including pharmaceutical) = $40

bn in 2006

•Market is expected to grow to $75.8 bn - 13.6% CAGR by 20119

Source: Datamonitor, Chemicals in India, October 2007
 Domestic Industry

Industry divided into 3 segments:

3. Basic chemicals
4. Specialty chemicals and
5. Knowledge chemicals.

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Source: KPMG Report
 Industry classification

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Source: KPMG Report
 Trends in Exports

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Data Source: DGCIS, Kolkata
Major export destinations

• UAE
• United States
• United kingdom
• China

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Source:
 Major Exporters

•Indian Petrochemical Corporation Limited (IPCL)

•Gas Authority of India Limited (GAIL)
•Haldia Petrochemicals Limited
•Tata Chemicals
•Asian Paints
•Ciba
•Rallis
•Hindustan Organic Chemicals (HOCL)
•Reliance Industries Limited (RIL)
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Source:
 Global Chemical Industry
Global Chemical Industry = $2.4 trillion

• Europe 36%
• China 10%
• India 2%
• NAFTA 25%

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Source: “CEFIC Facts & Figures Report,”
 Global Competitors
(

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 FTP Provisions
• Duty free import of specialized inputs /chemicals and flavoring
oils is allowed to the extent of 1% of FOB value of preceding
financial year’s export.

• Export of Special Chemicals, Organisms, Materials, Equipment

and Technologies shall be subject to fulfillment of the conditions
indicated in ITC(HS).

• Exports and Imports shall be free, except where regulated by FTP

or any other law in force.

• The procedure for facilitating foreign direct investment has been

simplified. Most of the chemical items fall under the RBI
automatic approval route for FDI/NRI investment up to 100 per
cent. 17
Source:
Tariff on chemicals

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 Recommendations
• World is becoming increasingly competitive & only the best &
the most competitive will survive. Incentives should be made
available to the industry where Larger MNCs start to have a
direct and noticeable effect.

• Even though India enjoys an abundant supply of basic raw

materials, it will have to build upon technical services and
marketing capabilities to face global competition and increase
its share of exports.

• As the Indian economy was a protected economy till the early

nineties, very little large-scale R&D was undertaken by the
Chemical industry to create intellectual property. The Industry
would, therefore, have to make large investments in R&D to 19
Quality Standards

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Future Prospects

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Source: KPMG Report
 References
•Department of chemicals and petrochemicals, Chem
Report 2008
•Overview of the chemical industry, KPMG report 2008
•Organic chemicals annual review, Crisil Research,
December 2008
•Datamonitor, Chemicals in India, October 2007
•WTO international trade statistics, 2007

Websites
www.chemindia.org
http://commerce.nic.in/trade/national_ftpp.asp?id=3&trade
=n
http://en.wikipedia.org/wiki/Chemical_industry
explore.oneindia.in/detail/2/chemicals-nic-in.html 22