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NITI Aayog proposes incentives to boost India's chemical exports by 2030.

Where does India stand in the global chemical industry?

According to a NITI Aayog Report, India ranks 6th largest chemical producer worldwide (3rd largest in Asia), and the chemical sector contributes 7% to India's national GDP. However, when excluding pharmaceutical products, India ranks 14th in global chemical exports.

The Indian chemical market was valued at $220 billion in 2023, and the government and industry expect to increase that to $1 trillion by 2040.

In 2023, India experienced a trade deficit of $31 billion in chemicals. India's share in global chemical supply chains was only 3.5% in 2023, which is much lower than China's 23%.

Chemical manufacturing in India mostly concentrates in Maharashtra and Gujarat. West Bengal and Tamil Nadu also serve as major contributors to the industry.

India is a global player in several niche segments:

• It is the 4th largest agrochemical producer.
• It ranks as the 3rd largest polymer consumer.
• India acts as a major exporter of dyes and colorants, contributing 16–18% to global dyestuff production and holding about a 15% market share in colorants.

Government Initiatives and Policy Support

De-licensing => The sector is largely de-licensed, except for hazardous chemicals, making it easier to start and operate chemical businesses.

Promoting PCPIRs and Plastic Parks => The government promotes Petroleum, Chemicals, and Petrochemicals Investment Regions (PCPIRs) and plastic parks. These provide modern infrastructure, aim to increase output, and generate employment.

NITI Aayog's New Roadmap for Exports

Developing production clusters => Establishing new and upgrading existing manufacturing hubs to allow for larger scale production.

Upgrading port infrastructure => Improving ports for better logistics and storage of chemicals.

Launching a sales-linked incentive scheme => Introducing a program that provides financial incentives based on sales, encouraging local production and exports of critical chemicals.

The Niti Aayog report suggests India can double its share in global value chains to 5–6% by 2030. This will happen by shifting its focus from producing large quantities of basic bulk chemicals to higher-value, high-demand specialty chemicals. With the right policy support, this shift could increase exports by an additional $35–40 billion by 2030.

Source: 

INDIAN EXPRESS