India’s chemical sector started recovering from the downturn of the past few years. However, returns on capital may take another two to three years to improve, as companies work to increase utilisation of the large capacities commissioned during the previous investment cycle, according to a sector report by Equirus Capital. The September 2026 report, Indian Chemicals: The Reset, noted that recovery is becoming visible in company earnings. However, profitability has improved faster than asset utilisation. Equirus expects recently commissioned plants to gradually scale up, allowing capacity utilisation and returns on capital to improve over the next two to three years.

Chemical Sector Margins Improve in FY27

The recovery became more evident in the first quarter of FY27. Across Equirus Capital’s coverage universe of 72 listed Indian chemical companies, median revenue increased 22% year-on-year, while 83% of the companies reported revenue growth. Meanwhile, the sector’s aggregate margin improved to 17.4% from 15.5% in the previous quarter. Nevertheless, Equirus cautioned that higher realisations linked to movements in crude oil and freight costs contributed to part of the improvement. Therefore, sustained volume growth will remain important in determining the strength of the recovery. Agrochemicals, the largest chemical sub-segment, continued to report weak revenue trends. Consequently, investors and industry participants will closely track volume growth over the coming quarters.

Capacity Utilisation Remains a Key Challenge

Despite improving margins, capacity utilisation remains a major concern for the Indian chemical industry. Established specialty chemical plants are currently operating at around 60–75% utilisation, while recently commissioned facilities are running at only 20–30%. According to Equirus, the speed at which these new and underutilised plants reach higher operating levels will largely determine how quickly returns on capital recover. As utilisation improves, companies can spread fixed costs across higher production volumes, which should support profitability and improve returns on the capital already invested.

Downturn Seen as Cyclical Rather Than Structural

Equirus views the 2023–25 chemical industry downturn as largely cyclical and capacity-driven, rather than a structural deterioration in India’s chemical sector. During this period, excess capacity in China, aggressive pricing, subdued global demand and customer destocking put pressure on margins and returns. At the same time, Indian chemical companies continued to invest in new manufacturing capacity, creating a gap between installed capacity and actual utilisation. However, the brokerage believes the underlying growth drivers for India’s chemical industry remain intact.

Specialty Chemicals Market Offers Long-Term Growth

India’s specialty chemicals market was estimated at around $36 billion in 2025 and is projected to grow at approximately 11% annually to nearly $61 billion by 2030. This growth is expected to outpace both the broader domestic chemicals industry and the global specialty chemicals market. Rising domestic demand, import substitution and growing opportunities for differentiated chemistry could therefore support the next phase of expansion.

Utilisation and Demand to Drive the Next Growth Cycle

Equirus believes the Indian chemical sector is now “finding its footing”, with much of the major capital expenditure cycle behind it. Going forward, improved capacity utilisation will be crucial for converting these investments into stronger earnings and returns. At the same time, domestic demand, import substitution and differentiated chemical products are expected to support growth. As reported by tribuneindia.com, if utilisation improves as anticipated, the sector could gradually move from margin recovery to a broader recovery in return on capital over the next two to three years.

AM Green Ammonia bagged the Asian lot in the second round of the H2Global tender to supply green ammonia to Germany. The company bagged a ten-year contract with a value of at least €585 million, strengthening India’s position as a potential major supplier of renewable ammonia to European markets. The German government funds the H2Global scheme, which aims to accelerate the development of international markets for renewable hydrogen and its derivatives. Under the arrangement, German intermediary Hintco will purchase the green ammonia from producers and resell it to European customers. The latest agreement builds on AM Green’s growing presence in the German market. Earlier, the company signed an agreement with Uniper to supply 500,000 tonnes of green ammonia annually and also entered into supply agreements with RWE and BASF.

Green Ammonia to Come from Kakinada Plant

AM Green will produce the contracted ammonia at its Kakinada plant in Andhra Pradesh. The company is converting an existing facility that previously used natural gas to produce ammonia and urea. However, the upgraded facility will use electrolysis to produce the hydrogen required for ammonia production. The resulting green ammonia will need to meet European requirements for Renewable Fuels of Non-Biological Origin (RFNBO). The project will therefore support the production of renewable ammonia using green hydrogen while helping reduce the carbon intensity of ammonia production.

First Shipments Expected in 2029

AM Green plans to begin deliveries to Germany in 2029, with shipments originating from the port located adjacent to the Kakinada facility. The contract value could rise beyond €585 million. This is because Hintco can use revenue generated from reselling the ammonia in the European market to purchase additional volumes under the terms of AM Green’s offer. The H2Global model aims to address the price gap between the cost of producing renewable hydrogen derivatives and the prices that industrial users are currently prepared to pay. Through long-term purchase agreements and subsequent auctions, the mechanism provides greater investment certainty for producers while supporting reliable supplies for European buyers.

India Strengthens Green Ammonia Export Potential

Timo Bollerhey, Managing Director of Hintco and co-founder of H2Global, said long-term contracts provide producers such as AM Green with the investment certainty needed to scale production while ensuring reliable supplies for European customers. Meanwhile, Mahesh Kolli, Chairman of the AM Green Group, said the latest award demonstrates India’s ability to supply renewable ammonia at an industrial scale and competitive prices. He added that production from Kakinada will enable AM Green to serve customers across Europe and Asia, helping convert decarbonisation targets into tangible reductions in industrial emissions. As reported by hydronews.it, the H2Global contract marks another significant step for India’s green hydrogen and green ammonia industry, while strengthening the country’s role in the emerging global clean-energy supply chain.

The Basic Chemicals, Cosmetics & Dyes Export Promotion Council (CHEMEXCIL), set up by the Ministry of Commerce & Industry, Government of India, hosted its 49th Export Awards Ceremony. The flagship event recognised the exceptional export performance of its member-exporters during the financial years 2021–22 and 2022–23. S. Satyanarayana, Director, Department of Commerce, Ministry of Commerce & Industry, attended the ceremony along with Dr. Satish Wagh, Chairman, CHEMEXCIL; Ankit Patel, Vice Chairman, CHEMEXCIL; and Vishal S. Ganju, Executive Director, CHEMEXCIL. The Council recognised 70 exporters across competitive categories and presented three special honours to acknowledge outstanding contributions to the chemical export sector.

Lifetime Achievement Awards Honour Industry Leaders

CHEMEXCIL conferred its prestigious Lifetime Achievement Award on Padma Bhushan and Padma Vibhushan Professor M. M. Sharma for his distinguished contribution to the chemical industry. His work has made a significant impact on the development of chemical engineering and industrial research in India. The Council also presented a Lifetime Achievement Award to Ajay Kadakia, Chairman, Vivil Exports Pvt. Ltd., recognising his contribution to the export industry.

Emerging MSME and Compliance Excellence Recognised

Meanwhile, Supriya Lifescience Ltd. received the Emerging MSME of the Year Award for 2022–23 for its rapid market development and growing presence in international markets. In addition, GPC Regulatory India Pvt. Ltd. received the Compliance Leader Award for its contribution to regulatory compliance management frameworks. The recognition highlights the growing importance of strong compliance systems in supporting global chemical exports.

CHEMEXCIL Calls for Greater Export Competitiveness

Congratulating the award winners, CHEMEXCIL Chairman Dr. Satish Wagh praised the resilience of Indian exporters amid changing global trade conditions. He also urged the industry to capitalise on emerging opportunities created by the diversification of global supply chains. As reported by tribuneindia.com, Dr. Wagh emphasised the need for exporters to strengthen their global competitiveness through innovation, quality, sustainability and greater value addition. These priorities, he noted, will help Indian chemical and allied industries expand their presence in international markets.

Technip Energies bagged contracts from Petkim, a subsidiary of SOCAR, for the development of a proposed integrated petrochemical complex in Aliağa, Türkiye. The awarded contracts cover the licensing of a world-scale mixed-feed ethylene cracking unit, along with the integrated Process Design Package (PDP) and Front-End Engineering Design (FEED) services for the proposed complex.

Project to Include 1,200 KTA Ethylene Cracker

Under the FEED scope, Technip Energies will support the development of a steam cracker designed to produce approximately 1,200 KTA of ethylene and 550 KTA of propylene. The proposed complex will also include an 850 KTA HDPE/LLDPE facility, comprising two 425 KTA production trains, as well as a 550 KTA polypropylene plant integrated with the new cracker. The integrated configuration is designed to connect the cracker with downstream polyolefin production, creating a large-scale petrochemical manufacturing platform.

Project Moves Towards Final Investment Decision

The awarded scope covers the licensing, PDP and FEED phases of the proposed project. Consequently, the contracts represent an important step in establishing the project’s technical and engineering foundations before Petkim takes a Final Investment Decision (FID). Once developed, the integrated petrochemical complex is expected to produce key petrochemical building blocks used across a wide range of industries. These include packaging, consumer goods, automotive components and industrial applications.

Technip Energies to Support Project Development

Stéphane Mespoulhes, Senior Vice President, Ethylene and Polyolefins at Technip Energies, said the company is pleased to support Petkim during this important stage of the project. He added that Technip Energies will combine its ethylene technology and engineering expertise to support Petkim through the PDP and FEED phases. As per the press release, the early-stage collaboration is expected to establish the technical foundations for an efficient, flexible and competitive petrochemical complex.

Vedanta Oil and Gas is planning to invest around $200 million (₹2,000 crore) during 2026–27 to increase crude oil production from its mature fields in Rajasthan. The company will focus on improving output from existing wells and slowing the natural decline in reservoir production. The investment will primarily target the Mangla, Bhagyam and Aishwariya fields in northern Rajasthan.

Focus on Boosting Mangla Field Production

Vedanta will initially focus on the Mangla oil field, whose discovery in 2004 helped establish Barmer as India’s largest onshore oil-producing region. The company aims to increase Mangla’s crude oil production to more than 150,000 barrels per day (bpd) from around 80,000 bpd currently. To achieve this target, Vedanta plans to apply enhanced oil recovery techniques and optimise production from existing wells.

Enhanced Recovery Technologies to Raise Output

Vedanta plans to use a combination of polymer flooding, well interventions and alkaline-surfactant-polymer (ASP) injection to improve recovery from the mature reservoirs. These technologies can help mobilise additional crude from existing reservoirs and extend the productive life of established oil fields. Consequently, the company expects to increase recovery without relying solely on new field discoveries.

Vedanta Expands Focus on Gas Production

Meanwhile, Vedanta is developing northeast India as a new hub for gas production. The company plans to increase output from its existing assets while also exploring opportunities in smaller sedimentary basins. As reported by businesstoday.in, through these initiatives, Vedanta aims to strengthen its oil and gas production portfolio by improving recovery from mature assets and developing new opportunities across India’s hydrocarbon-producing regions.

Haldia Petrochemicals Limited announced key appointments to its senior leadership team, effective 30 September 2026. The appointments will strengthen the company’s leadership structure and support its strategic priorities and next phase of growth. Navanit Narayan, who currently serves as Whole-time Director and Chief Executive Officer of Haldia Petrochemicals, has been appointed Managing Director of the company. In his expanded role, Narayan will continue to work with the leadership team and stakeholders to advance HPL’s business priorities, strengthen operational performance and pursue sustainable growth opportunities.

Kaushik Sarkar Joins as Chief Financial Officer

Haldia also appointed Kaushik Sarkar as Chief Financial Officer and Key Managerial Personnel. Sarkar brings more than 30 years of experience across leading organisations, including Bosch Global Software Technologies, AxisCades Engineering and Technologies, Adobe, Oracle and Siemens. His professional experience covers finance and controlling, P&L management, strategic planning, mergers and acquisitions, investments, business operations and digital transformation.

Before joining HPL, Sarkar served as Senior Vice President, Group Chief Financial Officer and Executive Director at Bosch Global Software Technologies. He is a Fellow Member of the Institute of Chartered Accountants of India and a Cost and Management Accountant. He is also an alumnus of the Indian School of Business. In addition, Sarkar received the CII CFO of the Year 2024–25 – Digital Transformation recognition.

Supporting HPL’s Next Phase of Growth

The leadership appointments come as Haldia Petrochemicals continues to strengthen its management capabilities and advance its strategic priorities. The company will focus on operational excellence, competitiveness, sustainable growth and long-term stakeholder value. As reported by pninews.com, Narayan said the company would continue working with its employees and stakeholders to strengthen HPL and its subsidiaries, with a focus on operational excellence, competitiveness and sustainable growth. Sarkar said he looked forward to working with HPL’s leadership team and employees to strengthen the company’s financial and business capabilities and support its strategic growth ambitions.

DCM Shriram commissioned new downstream chemical facilities at Bharuch, Gujarat, comprising a 100 TPD Aluminium Chloride plant and a 133 TPD Calcium Chloride plant. The company completed the facilities as part of its strategy to strengthen downstream manufacturing and expand its value-added specialty chemicals portfolio. The commissioning also marks an important step in DCM Shriram’s forward integration strategy, enabling the company to increase the captive utilisation of chlorine generated from its Chlor-Alkali operations.

Commercial Operations Begin in September

DCM Shriram moved the Bharuch chemical expansion projects from pre-commissioning trials in Q1 FY27 to commercial operations on 30 September 2026. Consequently, the new facilities will convert captive chlorine into higher-value downstream chemicals and support more efficient utilisation of the company’s existing chemical production chain.

Expanding the Chlorine Value Chain

The facilities will deepen DCM Shriram’s integrated chlorine value chain by consuming chlorine from its Chlor-Alkali operations. This approach will help the company increase downstream value addition while reducing dependence on external markets for product expansion. Furthermore, the project broadens the company’s specialty chemical portfolio and strengthens its presence in the domestic aluminium chloride market.

Entry into Calcium Chloride Business

With the new 133 TPD Calcium Chloride facility, DCM Shriram has entered the calcium chloride business. As reported by sahi.com, at the same time, the 100 TPD Aluminium Chloride plant will further strengthen the company’s downstream chemical manufacturing capabilities. Overall, the expansion supports the company’s transition from a capital-intensive investment phase towards volume-led growth and greater value addition.

The union cabinet, chaired by the Prime Minister approved the Green Energy Corridor Phase-III (GEC-III) scheme to strengthen India’s Intra-State Transmission System (InSTS). The initiative will support the evacuation of up to 135 GW of renewable energy across States and Union Territories. The scheme will also accelerate the integration of renewable power into the national grid while strengthening transmission infrastructure within participating States and Union Territories.

50 GWh Battery Storage to Support Grid Flexibility

Alongside transmission infrastructure, GEC-III will deploy 50 GWh of Battery Energy Storage Systems (BESS). The Government will install these systems at renewable energy developer or generator sites, or at other strategically important locations. The battery storage capacity will help address key challenges associated with renewable energy, including intermittency, transmission congestion and peak-hour curtailment. In addition, BESS will help meet electricity demand during non-solar hours and improve overall grid flexibility.

₹1.86 Lakh Crore Project Outlay

The Government plans to implement the GEC-III scheme by FY 2032–33 with a total project outlay of ₹1,86,405 crore. The investment includes:

₹1,36,378 crore for developing Intra-State Transmission Systems under GEC-III.

₹50,000 crore for deploying 50 GWh of Battery Energy Storage Systems.

₹54,082 crore in total Central Financial Support.

Furthermore, the Central Financial Assistance will help offset Intra-State transmission charges and, consequently, contain the cost of electricity. This support is expected to benefit end users by helping keep power costs lower.

Competitive Bidding for Greenfield Projects

The government will implement all greenfield Intra-State transmission projects through Tariff-Based Competitive Bidding (TBCB). Meanwhile, brownfield upgrades and network-strengthening works will follow the Cost Plus Basis (CPB). State Transmission Utilities will serve as the overall implementing agencies. Under the TBCB model, Transmission Service Providers will participate through a Build-Own-Operate-Maintain (BOOM) framework.

Supporting India’s Renewable Energy Goals

GEC-III will contribute to India’s target of achieving 900 GW of installed non-fossil fuel capacity by 2035. By expanding transmission capacity and integrating battery storage, the scheme will support the increasing share of renewable energy in the electricity mix. Moreover, the initiative is expected to strengthen India’s long-term energy security and promote more sustainable economic growth by supporting the transition towards lower-carbon power generation.

Boosting Jobs and Domestic Energy Storage

The scheme will also create direct and indirect employment across the power, manufacturing and construction sectors. In particular, the deployment and manufacturing of Battery Energy Storage Systems will support growth in India’s domestic energy storage industry. As reported by pmindia.gov.in, the expansion of transmission infrastructure will create long-term skilled employment opportunities in operations, maintenance and grid management across participating States and Union Territories.

The government announced a new scheme in the Union Budget 2026–27 to support States in establishing three dedicated Chemical Parks through a challenge-based selection process. The Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme received approval from the Union Cabinet on 24 July 2026. Following the cabinet approval, the Government issued a Gazette Notification on 10 August 2026. Subsequently, it formulated detailed guidelines for implementing the BHAVYA Rasayan Scheme.

Strengthening India’s Chemical Industry

The BHAVYA Rasayan Scheme aims to accelerate the growth and development of India’s chemical and petrochemical sector by addressing critical infrastructure gaps. In addition, the scheme seeks to strengthen the sector’s manufacturing capabilities and create a more competitive industrial ecosystem. The initiative will focus on increasing domestic production capacity, reducing import dependence and boosting exports. By improving infrastructure and lowering production-related costs, the scheme also aims to enhance the cost competitiveness of India’s chemical industry.

States Invited to Submit Proposals

As reported by chemicals.gov.in, the government has invited all states to submit proposals for establishing dedicated Chemical Parks under the BHAVYA Rasayan Scheme. The deadline for submitting proposals is 30 November 2026. States must submit their proposals in the prescribed format along with all required supporting documents. These include drawings, calculations, undertakings and other documents specified under the applicable scheme guidelines. The challenge-based selection process is expected to identify proposals that can support the development of well-planned Chemical Parks and strengthen India’s chemical and petrochemical manufacturing ecosystem.

Shivam Chemicals Limited commenced phase I production of feed-grade Dicalcium Phosphate (DCP) at its subsidiary’s manufacturing unit in Dahej, Gujarat. The development adds in-house manufacturing capabilities to the group’s existing sales and distribution network.

5,000 MT Monthly Production Capacity

Production is being undertaken by wholly owned subsidiary Shivam Chemicals & Minerals Private Limited. The initiative strengthens the company’s presence in the feed phosphate business by integrating manufacturing with its established sales and distribution platform. The new DCP facility also complements the group’s existing Hydrated Lime manufacturing operations, which have an installed production capacity of approximately 5,000 MT per month. Dicalcium Phosphate is an important source of phosphorus and calcium used in animal nutrition and feed formulations.

Expanding the Feed Phosphate Value Chain

By bringing DCP manufacturing in-house, Shivam Chemicals aims to strengthen its participation across the feed phosphate value chain. The development supports the company’s strategy of integrating manufacturing, expanding its product portfolio and increasing its presence in value-added products. As reported scanX, the Dahej facility represents Phase I of the planned development of the company’s feed phosphate manufacturing business, providing a platform for further expansion in the segment.