Green Chemistry The Chemical Industry in India is Poised to Chart Strong Growth in the Times to Come

| Editor: Marion Henig

Favourable government initiatives, a strong ‘green’ approach and robust R&D are propelling the Indian chemical industry to new heights.

The ´green´side of chemistry on the growth path. (Picture: Shutterstock)
The ´green´side of chemistry on the growth path. (Picture: Shutterstock)

Facilitating India’s march from being an agrarian to an industrialised economy, while providing huge employment opportunities, the chemical industry — one of the oldest in India — is a significant contributor to the economic development of the country. From a producer of basic chemicals, the industry has forged ahead to even earn global repute as a manufacturer of fine chemicals on the back of strong R&D activities.

The Indian chemical industry boasts of being Asia’s third-largest industry, and holds the sixth rank globally in terms of volume. Growing at an average rate of 12.5 percent, the industry contributes around five percent to


the country’s GDP.

Speaking at an event on waste management organised by Vibrant Gujarat, Ravi Kapoor – Chairman of the Indian Chemical Council (ICC), Gujarat Chapter, revealed that the chemical industry accounts for eleven percent of the 21 percent-contribution made by industrial activity to the country’s GDP.

On the growth path

According to industry-wise Index of Industrial Production data, the Indian chemical industry recorded 6.7 percent growth during the period April–June 2010–11. This growth has been facilitated by several favourable

factors such as rise in per capita income, proliferating consumer needs, availability of intellectual workforce with strong technical skills and good outsourcing options of valueadded chemicals, etc.

Comprising basic, specialty and knowledge chemicals, the industry caters to a wide range of end-user industries producing various commodities such as pharmaceuticals, fertilisers, textiles, plastic, polymers, agrochemicals, and paints and dyes, among others.

  • Basic chemicals:India has been making remarkable progress as a manufacturer of basic chemicals — a segment dominated by petrochemicals. With petrochemicals finding use in almost all user industries, growth prospects of the segment remain strong. Moreover, with plastic being widely used in manufacturing a host of commodities, polymer processing is steadily becoming an organised business. Considering the rising demand for petrochemicals, most chemical companies dealing in the commodity are increasing their plant size to ensure greater production capacity. Notably, India now boasts of having the world’s largest polypropylene plant.
  • Specialty chemicals: Heavily dependent on end-user industries, this segment has recorded more or less uniform growth over the years. During the economic recession, specialty chemicals used in certain specific export- oriented industries suffered major losses. Post recession, however, with a surging demand in key consumer industries such as construction, automobiles and textiles, among others, specialty chemicals have been able to record pre-downturn growth rate. Coupled with growth, customised demands from consumers have also moved northward. Now, specialty chemicals have to be manufactured keeping in mind consumer requirements. The need of the hour, therefore, is continuous innovation at low costs to maintain a competitive edge.
  • Knowledge chemicals: This segment remained largely insulated during the global economic downturn. Comprising mainly agrochemicals and pharmaceuticals, knowledge chemicals hold bright future prospects. The segment has made prominent headway in the area of R&D and technological innovation. On the back of a cheap yet intellectual workforce, knowledge-based chemicals are now manufactured as per global standards. In fact, Indian generics are now in great demand across the world.