The government has earmarked ₹600 crore in the 2026–27 budget to support the creation of three dedicated chemical parks, marking the first instance of direct budgetary funding for such infrastructure. Finance minister Nirmala Sitharaman said the scheme will help states strengthen domestic chemical manufacturing, reduce import dependency, and build globally competitive production clusters.
Challenge Route and Plug-and-Play Model
To accelerate implementation, the government will adopt a challenge-based selection process, allowing states to compete for approvals. At the same time, the parks will follow a cluster-based, plug-and-play model, enabling companies to quickly set up operations with ready infrastructure. “To enhance domestic chemical production and reduce import dependency, we will launch a scheme to support states in establishing three dedicated chemical parks,” Sitharaman said. This approach aims to reduce project delays while attracting fresh investments into the sector.
Boosting Domestic Manufacturing Capacity
The announcement comes amid rising domestic demand for chemicals across industries such as pharmaceuticals, agrochemicals, petrochemicals, and specialty materials. By creating dedicated industrial zones, the government intends to improve economies of scale, lower logistics costs, and enhance supply chain efficiency. Importantly, the parks are expected to promote innovation, local production, and import substitution, strengthening India’s self-reliance in critical chemical inputs.
Building on Existing Industrial Cluster Policies
The move builds on earlier initiatives aimed at developing chemical manufacturing hubs. Minister of State for Chemicals and Fertilisers Anupriya Patel noted that the government has already rolled out two major programmes to promote chemical industrial parks:
Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs)
Notified in 2007, the PCPIR policy focuses on attracting large-scale investments through integrated, cluster-based regions with shared infrastructure and support services. Three PCPIRs were established:
Visakhapatnam, Andhra Pradesh
Dahej, Gujarat
Paradip, Odisha
Plastic Parks Scheme
Launched in 2010–11, this scheme promotes need-based plastic parks with common facilities and utilities. So far, 10 plastic parks have been approved across multiple states, with several already operational. Furthermore, all three PCPIRs align with major industrial corridors, enhancing connectivity and trade access. The Dahej PCPIR connects to the Delhi–Mumbai Industrial Corridor, while Visakhapatnam and Paradip link to the East Coast Economic Corridor.
Strengthening India’s Chemical Ecosystem
With fresh funding and a focused implementation strategy, the proposed chemical parks are expected to accelerate capacity creation, attract private investment, and strengthen India’s position as a global chemicals manufacturing hub. As reported by business-standard.com, as the sector continues to grow, dedicated infrastructure could play a pivotal role in supporting exports, improving competitiveness, and meeting the country’s long-term industrial ambitions.
