India is laying out an ambitious roadmap to significantly expand its footprint in the global chemical value chain. Despite being the world’s sixth-largest producer, the country currently contributes just 3.5% to global chemical value chains and posted a trade deficit of $31 billion in the sector in 2023. In response, the government’s policy think tank, NITI Aayog, has unveiled a strategy to raise this share to 12% by 2040 and transform the industry into a $1 trillion powerhouse.
Seven Strategic Pillars to Drive Growth
To achieve this transformation, NITI Aayog has identified seven core initiatives. These include creating world-class chemical hubs through the development of both new and existing clusters. A central empowered committee and a dedicated chemical infrastructure fund will support this development. Additionally, the plan envisions setting up port-based clusters in eight high-potential regions, with port-specific chemical committees backing them to strengthen logistics, storage, and connectivity.
The government also aims to provide operational expenditure (OPEX) subsidies to incentivize local production of critical chemicals, especially those that are currently import-dependent or have strong export potential. This would help reduce the trade deficit while also encouraging domestic manufacturing.
Focus on Innovation, Regulation, and Talent
NITI Aayog has emphasized the need for enhanced research and innovation in the sector. It plans to increase R&D funding, foster stronger collaborations between academia and industry, and promote global technology partnerships. In parallel, the government seeks to streamline regulations by establishing a fast-track environmental clearance mechanism under the Department for Promotion of Industry and Internal Trade (DPIIT), making the approval process more efficient and transparent.
Developing skilled talent is another cornerstone of the plan. The roadmap includes expanding technical training infrastructure such as Industrial Training Institutes (ITIs), upgrading faculty, and focusing on critical areas like green chemistry and process safety to meet the evolving needs of the industry.
Trade Policy and Global Realignment
On the trade front, the government is advocating for sector-specific free trade agreements (FTAs) that provide tariff exemptions for essential raw materials. It also intends to educate Indian exporters on how to fully leverage the benefits of existing FTAs. These measures are designed to improve competitiveness and ease the cost of doing business globally.
Importantly, India is looking to seize the opportunity created by global supply chain realignments, especially as countries diversify away from China. The chemical sector, therefore, becomes a strategic area for India’s broader goals of self-reliance under the Make in India and Atmanirbhar Bharat initiatives.
India’s Moment to Lead
As reported by Indian Chemical News, these initiatives collectively aim to position India as a global hub for speciality and sustainable chemicals. The strategy is not only geared toward increasing exports and reducing import dependency, but also toward job creation—with an estimated 700,000 skilled positions expected by 2030. If executed effectively, this roadmap could mark a turning point in India’s emergence as a dominant player in the global chemical industry.
