According to a report by IDBI Capital, the Indian chemical industry has the potential to achieve a market value of $1 trillion by the year 2040, with a Compound Annual Growth Rate (CAGR) ranging from 8% to 10% over the period of 2021 to 2040.
This optimistic outlook is driven by several factors, including the increasing expertise in chemistry, the ability to scale up production, and a commitment to financial discipline. The Indian government is also actively promoting economic diversification within the country, further boosting the industry’s potential.
Finance minister Nirmala Sitharaman, revealed at the recently held ‘Global Chemicals and Petrochemicals Manufacturing Hubs in India’ summit, that the government is exploring the possibility of introducing a Production Linked Incentive (PLI) scheme tailored for the chemicals and petrochemicals sector. This move aims to position India as a prominent manufacturing hub for these products.
As reported by Knowledge and News Network, the minister highlighted that global manufacturers operating in the chemical industry are actively looking to diversify their product portfolios and production capacities, and India is emerging as an attractive alternative destination for manufacturing activities.
Despite the challenges in the global chemical industry, particularly in China, the IDBI Capital report underscores that domestic chemical industry players in India are strategically investing in the development of robust research and development infrastructure in anticipation of future growth. Moreover, they are prudently allocating capital to support their expansion and innovation efforts.
