Chemical Industry in India
The Indian Chemical Industry is Poised for Substantial Growth
Towards 2020: Buzz around specialty chemicals
Requiring low capital investment for lower volumes of production, the specialty chemicals segment caters to a host of end-user industries. Being a highly knowledge-driven segment, specialty chemicals provide solutions to meet diverse consumer requirements. With increase in disposable income of consumers and consequent demand surge for ‘green’ or sustainable products, the importance of such high performance specialty chemicals is moving northward and so is their pricing.
According to a report released by the Tata Strategic Management Group, India has the potential to emerge as a global hub for manufacturing specialty chemicals by 2020 by atering to local needs and leveraging its growing market abroad. Agreeing with this view, SR Lohokare–Chairman, Western Region, ICC, said that India is quite well-placed in the specialty chemicals segment, where significant headways are being made. Finding usage in diverse products ranging from personal care products to dyes and paints, from food and nutraceuticals to agrochemicals, this segment has presence of both small and big players.
Estimated to be worth around US$ 27bn currently [Tata Strategic Management Group], the specialty chemicals segment is poised for significant growth. This segment was adversely impacted during the global economic slowdown. However, post-recession it has successfully returned to the growth trajectory due to growth being witnessed in several industries that it caters to such as infrastructure, automobile, and textiles among others. Currently, it is growing at 15 percent per annum [Tata Strategic Management Group], which is faster compared to other segments within the industry. Consumer demand has reached a new level altogether, requiring constant product innovation. Therefore, the specialty chemicals segment is now required to customise most products as per consumer requirements, which demands huge investment in R&D to undertake technology upgradation and ensure product innovation. Moreover, proper understanding about local needs is also vital to manufacture goods for the Indian market. To achieve this end, effective channels are required to reach out to consumers. What is an even more Herculean task is to protect the intellectual capital by having a proper regulatory framework in place and acquiring patents. In order to boost the quality and quantity, and encourage entrepreneurs to foray into the emerging segments of the domestic chemical industry like specialty chemicals, the government has come up with friendly policies. For instance, technology upgradation funds are being allocated to undertake effective R&D initiatives.