India’s agrochemical sector is experiencing rising demand in Europe, driven by regulatory changes that favour Indian exports, according to a recent report by Nuvama. The shift is part of a broader trend where India’s chemical industry is strengthening its global position as Europe’s competitiveness declines.
Pharmaceutical and Agrochemical Growth in India
India’s small-molecule pharmaceutical research sector is also expanding, benefiting from evolving market dynamics in Europe.
The Nuvama report highlights that India’s agrochemical industry is gaining momentum as European regulations increasingly support Indian exports.
Europe’s Competitive Edge in Chemicals Weakens
The report notes that Europe’s traditional dominance in the chemical sector is eroding, opening new opportunities for Indian manufacturers. As European production struggles, India is rapidly scaling up its output in fine chemicals, agrochemicals, and specialty chemicals. This expansion is fuelled by government incentives and India’s lower production costs, making it a more attractive hub for chemical manufacturing.
Multinational Companies Shift Operations to India
Many global chemical companies are relocating their manufacturing operations to India, further reducing Europe’s dominance. Europe is becoming increasingly dependent on chemical imports from India and China, which is reshaping the global chemical supply chain.
Decline of European Chemical Manufacturing
With local production losing competitiveness, Europe is transitioning from a chemical manufacturing powerhouse to an import-dependent region. Over the past year, this trend has accelerated, leading to significant capacity closures across the European chemical industry.
In 2023-24 alone, Europe witnessed the shutdown of around eleven million tons of chemical manufacturing capacity.
More than 21 major chemical plants have closed, a tenfold increase compared to historical averages. The report emphasizes that once these plants shut down, they do not reopen, causing a permanent decline in Europe’s industrial base.
India Emerges as a Key Chemical Supplier
As Europe’s chemical industry shrinks, India is strengthening its role as a global supplier. With cost-effective production and supportive government policies, Indian companies are well-positioned to capture a larger share of the global market in agrochemicals and specialty chemicals.
As reported by tribuneindia.com, Europe is shifting toward becoming a net importer of chemicals. India stands to gain significantly from this transformation.
