| India has achieved considerable progress in production | | | | commonly used in detergents, glass, soap, fertiliser, |
| of chemicals. And with slash in tariffs, Indian chemical | | | | alkalies etc. However, the industry is encountering stiff |
| companies with well-built systems and structured | | | | competition from international players, when it comes |
| operations are likely to be benefited further. | | | | to catering to the requirements of the local markets. |
| It is not only country’s oldest industry, but the Indian | | | | Organic Chemicals |
| Chemical Industry has been contributing to India’s | | | | It is reportedly 1billion dollar industry and includes an |
| growing economy in a phenomenal way. It may be | | | | array of chemicals. Most of the companies |
| hard to believe, but the industry serves the basic need | | | | manufacturing organic chemicals can be found in |
| of many different industry verticals like natural gas, | | | | western India. |
| water, oil, metals, minerals, air, oil, etc and all these | | | | Fine Specialties |
| verticals eventually bring into marketplace an array of | | | | The fine specialties segment is highly fragmented, with |
| products, almost 70000 products, to be precise. | | | | sizeable number of big players. However, all these |
| Today, India has achieved considerable progress in | | | | players operate on low volume and high price margin. It |
| production of basic organic and inorganic chemicals, | | | | is one of the fastest growing sectors with market |
| pesticides, paints, dyestuffs and intermediates, | | | | around US$80 million p.a. And many big and small Indian |
| petrochemicals, fine and specialty <a rel="nofollow" | | | | companies form part of it. The major end user |
| onclick="javascript:pageTracker._trackPageview(' | | | | segments include: Textile, Leather, paper, detergent, |
| outgoing/article_exit_link');" href= and toiletry product< | | | | rubber, paints, polyester, oil and gas etc. |
| a> segments. And with slash in tariffs, Indian | | | | Bulk Drugs |
| chemical companies with well-built systems and | | | | Bulk Drugs have a large market in India and in the |
| structured operations are likely to be benefited further. | | | | outside world. Out of the 475 drugs used, 425 are |
| The companies manufacturing highly valued chemicals, | | | | locally procured. There are around 350 units in the |
| and who are compliant of industrial quality standards, | | | | organized sector, while there can be many more in the |
| can make their mark not just in India but even in the | | | | unorganized sector. Bulk drug production is |
| overseas markets as well. | | | | concentrated in the areas around Bombay, |
| In Indian context, the rise in disposable income has led | | | | Ankleshwar, Hyderabad – Madras, Chandigarh. |
| to improved chemical consumption. This has aided | | | | India has very strong base in reverse engineering, |
| country’s GDP climb further, from 9% to 13%. In an | | | | molecular chemistry and patents on processes and |
| attempt to make the industry more progressive and | | | | not just on products. Major players in India in bulk drug |
| flourishing, the government of India has introduced a | | | | category include: Ranbaxy, Dr. Reddy's, Cheminor, |
| slew of policies and special economic zones centering | | | | Shasun, Cipla, Lupin, IPCA, Sun, Aurobindo, Kopran, |
| on the petrochemical sector. Furthermore, several | | | | Cadilla, Wockhardt, etc. It is a well-acknowledged fact |
| manufacturing companies are focusing on expansion | | | | that most of the bulk drug companies are Indian |
| plans in the coming years. | | | | companies while those into formulations are primarily |
| Chemicals and chemical products influence our lives in | | | | MNCs. |
| a significant way. Be it donning synthetic clothes, or | | | | Agrochemicals |
| consuming drugs, or when it comes to using | | | | India being an agricultural dominated country, it is |
| thermoplastic furniture at homes and offices, chemicals | | | | obvious that the country is a major user of |
| have become a way of life in this fast-changing world. | | | | agrochemicals; nonetheless, the average Indian |
| In addition, the industry plays a pivotal role in agricultural | | | | consumption is reportedly low i.e., 1/20th of world |
| and development sectors. Some of the other sectors, | | | | average. The segment has been witnessing a growth |
| like engineering, automotive, consumer durables and | | | | of 10% pa and has registered revenue worth US$800 |
| food processing also depend on this sector in a big | | | | million. Consumption of the crop varies depending on |
| way. | | | | the crop and region. Cash crops like sugarcane, |
| The industry is on a high growth trajectory. The | | | | tobacco etc. consume large amount of pesticides, |
| industry, through a series of efforts is expected to | | | | almost over 60%. Major agrochemicals exports include: |
| achieve USD 100 billion in the upcoming years. The | | | | Insecticides, Fungicides, Herbicides, Weedicides, |
| industry’s contribution to the Indian manufacturing | | | | Rodenticides, and Fumigants. |
| sector is almost 17.6 percent. Since the ages, Indian | | | | Paint and Dyes |
| chemicals have been traded and today imports stand | | | | Indian dyes are in demand world over, thanks to ban |
| at USD 7.92 billion and exports at 5.95 billion. And now | | | | on production of dyes in developed nations due to the |
| with the onset of liberalization and globalization, the | | | | reservations related to pollution. Dyes are principally |
| Industry is on a major expansion spree. The industry | | | | used in Paints, Inks, Textiles and Polymers. The total |
| today is into manufacturing wide range of goods | | | | market of paint and dyes is almost US$ 1 Billion, and |
| including fine and specialty chemicals, drugs and | | | | the growth rate is almost 12%. In addition, the |
| pharmaceuticals, dyes and pigments, agrochemicals | | | | marketplace is highly fragmented. There are about 25 |
| and fertilizers, pesticides, plastics and petrochemicals | | | | large and medium players, which cover 50% market |
| etc. | | | | share, while 2000 other organized players contribute |
| However, Indian chemical industry is yet to makes its | | | | next fifty percent. Moreover, the per capita |
| presence felt in a big way in the international markets. | | | | consumption is very low in India(400 gms) as opposed |
| Fast-facts on Indian chemical industry | | | | to the developed countries(15 kgs). |
| • Highly fragmented | | | | Overseas Trade |
| • Operates at the micro level. | | | | In the early 1990s, India was more into importing of |
| • Increased per capita consumption level has put | | | | chemicals; however, with the setting up of large scale |
| the industry on fast-track | | | | petrochemical plants like Reliance, etc exports have |
| • Higher cost of capital, import duties and power, | | | | improved. Even exports of bulk drugs, pharma, |
| making it less competitive in the international markets. | | | | pesticides, dyes and intermediates have climbed up. |
| • Very little spotlight on Resource & | | | | The overall performance of Indian Chemical Industry |
| Development | | | | has been good in the domestic markets; however, in |
| • Presence of many multinational companies | | | | the international markets the industry it is yet to make |
| • Big players in bulk chemicals. Presence of small | | | | its presence felt in a significant way. And factors like |
| and big players in fine and specialty chemicals. | | | | recession and crises in the Middle East have had a |
| Major Segments | | | | poor impact on the manufacturing and export sector |
| The Indian Chemical Industry has following major | | | | of the industry. |
| segments: | | | | The International Council of Chemical Associations |
| * Petrochemicals | | | | (ICCA), an association that consists 80% of the world |
| * Inorganic Chemicals | | | | manufacturers of chemicals has announced its support |
| * Organic Chemicals | | | | for a new round of multilateral trade negotiations in the |
| * Fine and specialties | | | | World Trade Organization. |
| * Bulk Drugs | | | | ICCA’s main concerns include: removal of chemical |
| * Agrochemicals | | | | tariffs, management of anti-dumping practices, making |
| * Paints and Dyes | | | | simpler the custom processes and full execution of |
| Petrochemicals | | | | TRIPs agreement. While management of anti- dumping |
| Petrochemicals form the biggest category in the | | | | practices would profit India, the tariff-free world would |
| chemicals, and it is also one of the fastest growing | | | | lead to stiff competition |
| sectors. The segement is into producing basic | | | | Road ahead |
| chemicals like Ethylene, Propylene, Benzene and | | | | Highly developed technology, in-depth research |
| Xylene etc, intermediates like MEG, PAN and LAB etc., | | | | capabilities, backward and forward linkages, |
| synthetic fibres like Nylon, PSF and PFY etc, polymers | | | | development of domestic capacity to decrease the |
| like LDPE/HDPE, PVC, Polyester and PET etc, | | | | dependence on imports are some of the crucial |
| synthetic rubber like SBR, PBR etc. The key players | | | | factors that need to be taken into consideration. |
| include: Reliance, IPCL, NOCIL, Haldia and GAIL etc. | | | | Nowadays, safety, health and environment protection |
| Inorganic Chemicals | | | | issues have become the major-talking point in almost |
| At present it is worth US$ 2.5 Billion industry. The | | | | all industries and even in the Indian chemical industry |
| segment concentrates on the production of caustic, | | | | too. The Indian chemical manufacturers are addressing |
| chlorine, sulphuric Acid etc. The inorganic chemicals are | | | | the issue on a war-footing. |