A surging economy has had a trickledown effect of sorts on the domestic chemical industry, which has benefitted from an increased demand for chemicals. And yet, this sector continues to battle a series of bottlenecks that may very well pave the way for its future.
Rich in opportunities, the Indian chemical industry has the potential to touch the US$ 200 billion-mark within the next decade. According to HS Karangle – Director General, Indian Chemical Council, with GDP forecast to grow at close to 9 percent, the demand for chemicals is expected to surge as well. Noticeably, the demand for most of the product categories in the Indian chemical industry is growing as a result of overall GDP growth. But the extent of this growth will be heavily impacted by the manner in which the industry tackles the serious bottlenecks it has been facing.
One of the biggest hurdles facing the sector is low investment in R&D. On the sidelines of India Chem 2010, Pratibha Devisingh Patel, President of India emphasised on the need for higher investment in R&D as well as human resource—a view echoed by industry experts as well. When PROCESS India contacted RK Bhatia – Head, Chemicals & Pharmaceuticals division, Federation of Indian Chambers of Commerce and Industry, he revealed that investments in R&D activities have been low and require immediate attention.
R&D is indeed an area that has been largely neglected, with the effect that backdated and obsolete technologies from the West are often adopted by the Indian chemical industry. Another associated problem is patent protection—only undertaking R&D initiatives is not enough; the research material has to be protected as well. This aspect is a major concern for the domestic pharmaceutical prosegment, for example, which is developing globally-reputed generics.
In order to ensure the overall development of the industry and bridge the existing technological divide, it is imperative to develop long-term strategies for sustaining innovative R&D initiatives. It is important to form foreign collaborations to undertake R&D activities, and thereby ensure technology upgradation. Notably, with 100 percent FDI being permissible in the domestic chemical industry, the prospects of bolstering R&D activities in collaboration with overseas companies look bright. Memorandum of Understanding (MoUs) can be signed with chemical associations abroad to ensure sharing of skill, technology and knowledge.
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